Khayah Cement is set to delist from the Zimbabwe Stock Exchange (ZSE), following creditor approval of a business rescue plan aimed at salvaging the company’s distressed operations.
By Ryan Chigoche
The decision comes amid mounting financial pressure, inherited debt, and U.S. sanctions that have hampered efforts by majority shareholder Fossil Mining to stabilise the business.
Fossil Mining, which acquired Khayah Cement (then Lafarge Zimbabwe) from Holcim in 2022 for US$29.7 million, inherited significant liabilities, chief among them, a legacy debt of US$11 million.
Since the acquisition, the company has struggled to modernize its infrastructure, with key assets like a 26,000-tonne-per-month clinker kiln overdue for maintenance and critical production capacity locked in two mothballed ball mills.
The delisting proposal, led by Corporate Rescue Practitioner Bulisa Mbano of Grant Thornton, was finalised at a creditors’ meeting in May.
Mbano argues that withdrawing from public markets will give Khayah the operational flexibility to restructure, renegotiate debt, and implement cost-cutting strategies without the constraints of shareholder reporting requirements.
However, the turnaround plan is unfolding under complex conditions. Sanctions imposed by the U.S. government on Fossil Mining and its shareholders have severely restricted the company’s access to global financial markets.
These sanctions not only inhibit Khayah’s ability to attract foreign investment but also complicate the procurement of financing necessary for rehabilitating essential production assets.
Khayah’s assets, including a 700,000-tonne-per-year Vertical Cement Mill and the two idle ball mills with 450,000 tonnes of combined annual capacity, remain underperforming.
Restoring these facilities is central to Mbano’s recovery strategy, but funding remains uncertain in Zimbabwe’s constrained economic environment.
The broader implications for Fossil Mining are significant. If the company proceeds with an exit, finding a new investor capable of navigating both Zimbabwe’s macroeconomic volatility and international sanctions will be a major challenge. Conversely, if Fossil remains committed, it will need to secure alternative funding channels and withstand geopolitical headwinds.
Khayah’s restructuring reflects the wider fragility of Zimbabwe’s industrial value chain, where mining-linked industries remain vulnerable to both legacy inefficiencies and global financial restrictions.
Whether the delisting results in a sustainable recovery or a strategic withdrawal will depend largely on how the company addresses these dual pressures—internal operational failure and external financial isolation.
