Oliver Kazunga, Senior Business Reporter
BORDER Timbers Limited has started the process to move from judicial management after reaching consensus with a major shareholder, VP Claimants, over the allotment of final awards compensating it for the loss suffered after part of its land was acquired by Government for resettlement.
The milling and timber manufacturing concern was placed under provisional judicial management in January 2015 and went into final judicial management in April 2016 after failing to service debts to several financial institutions.
Border Timbers’ exit from judicial management was mainly dependent on the settlement of a dispute with creditors over US$125 million awarded to the company by the International Centre for Settlement of Investment Disputes (ICSID).
In a circular to shareholders, Border Timbers said at their Extraordinary General Meeting held last week it has been agreed that in respect of the compensation, 57,5 percent would go to the company while 42,5 percent was for VP Claimants.
“The company be and is hereby authorised to enter into the Proposed Settlement Agreement pursuant to which the company and the VP Claimants’ entitlements to the relief in the Final Awards issued by the ICSID Arbitral Tribunal on 28 July 2015 in respect of the compensation in the amount of US$124 041 220 including for expropriation of the properties that were owned (directly or indirectly) by the company and pre and post award interest relating to that compensation shall be split in the percentages of 57,5 percent to the company and 42,5 percent to the VP Claimants respectively.”
Further to the process of moving from judicial management, Border Timbers advised shareholders that all the resolutions to appoint directors were passed.
“The appointment of directors for purposes of compliance with the requirements of the companies and Other Business Entities Act (Chapter 24:31) to enable the company to exit from judicial management.”