Published: 21 June 2015

The High Court has given struggling PG Industries Zimbabwe Limited (PG) the green light to continue with its scheme of arrangement with concurrent creditors, after its last attempt to register its debt repayment plan with the court hit a snag when a major creditor raised concern over the scheme.

PG, which owes various creditors nearly $12 million, had sought to file a scheme of arrangement - a court-approved agreement between a company and its shareholders or creditors - with the Court when a creditor, Jones Holdings, owed about $600 000, refused to vote for the arrangement.

However, High Court judge Justice Amy Tsanga, ruled that there was no reason for the court not to sanction the scheme stating that a clause in the document in relation to PG's lenders had to be modified.

Jones Holdings had opposed the scheme because it wanted to be regarded as a secured creditor.

The judge said PG had to replace the first paragraph in clause 2.1.1 of the scheme to say that it owes $5,3 million to secured lenders.

This also had to include the swop of debt owed by PG to lenders with immovable properties on mutually agreed valuations and other terms and conditions or a deferred payment plan to settle amounts owed on specific terms.

Early this year, the ailing company said it had plans of converting a total $7,1 million debentures into equity, noting that the conversion, at a price of $0,001, would include accrued and unpaid interest.

The $7,1 million comprises $6,72 million capital and $415 681 interest.
- dailynews

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