Zimbabwe: Zitac Creditors Set to Lose Out

Source from:  Zimbabwe Independent 04/18/2011

ZITAC creditors are set to lose out after it emerged this week that the former tobacco auctioneer's assets are far short of liabilities, documents seen by businessdigest show. Zitac's movable assets as at March 2 were slightly more than US$206 000 against claims in excess of US$3 million. The company was in February placed under provisional liquidation. Zitac's accounts with Zimbabwe Allied Banking Group (ZABG) as at March 7, when the accounts were frozen by the bank, had a US$325 268 balance, US$317 292 in Zitac's growers account and US$7 976 in the salaries account. Valuers - Asset Valuers and Managers Private Ltd (ABS) - have written to the provisional liquidator Luke Masomera of Obram Trust informing him of Zitac's financial position. "The grand total market value of movable assets in Harare located at Boka Auction Floors per the attached valuation summary and inventory was US$206 148 only," wrote Aubrey Tafira on behalf of ABS. Masomera, who was appointed provisional liquidator in February, would not be drawn to comment on the state of affairs at Zitac. Documents seen by businessdigest show that Zitac's liabilities are in excess of US$3 million. ZITAC workers union have submitted a US$1,045 million claim in outstanding salaries whilst the Zimbabwe Revenue Authority is demandingUS$945 009 in outstanding tobacco levy and US$60 303 in Pay As You Earn. Metropolitan bank have also written to Masomera claiming US$319 219. Asset valuation, conducted on market value basis for accounting purposes, was meant to establish the price at which assets may reasonably sell. Plant and machinery accounted for a greater chunk of Zitac's asset value at US$78 628 followed by miscellaneous worth US$57 096, a tobacco bail wagon valued at US$50 344 and a wood chain conveyer valued at US$3 132. The 6002-2RS bearings constitute 87% of miscellaneous at a value of US$49 824. The bearing is used in axial fans, motors, drive axles, clutch, idler wheels, HVAC, snow mobiles and other common industrial applications. Seven motor vehicles were valued at US$20 900. The valuation was, however, limited to physical appearance and information received as to the history and condition of each asset because no mechanical or electrical tests were carried out. Enditem