homebusiness Newscompanies NewsNava's subsidiary MCL reaches agreement with ZESCO
business | Dec 16, 2022 9:40 PM IST

Nava's subsidiary MCL reaches agreement with ZESCO


“ZESCO has agreed that the entire money will be settled towards the end of August 2023. It will come to designated escrow account,” Sultan Baig, CFO at Nava said.

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Nava’s step-down down subsidiary, Maamba Collieries Ltd (MCL), has been pursuing international arbitration against Zambia Electricity Supply Corporation Ltd (ZESCO) for outstanding receivables.
The arbitral tribunal has issued a consent award, and as per the award, ZESCO shall, by August 2023, discharge the outstanding and overdue arrears aggregating to about $518 million.
"This is a consent award issued by an international arbitration tribunal based in London," Sultan Baig, chief financial officer at Nava, earlier known as Nava Bharat Ventures, said to CNBC-TV18.
This award means that both the parties, MCL and ZESCO, have agreed on bilateral terms on how the debt will be disposed of over the next course. So it cannot be challenged further.
According to the settlement agreement, the money due to MCL will come in tranches. "ZESCO has agreed that the entire money will be settled towards the end of August 2023. It will come to a designated escrow account," he said.
Out of this $518 million of outstanding receivables, about $70 million will go towards the payment liabilities of the government of Zambia. "From the balance, over $220 million will go for the repayment of the outstanding overdue principal amount to the lenders. Balance amount will be available with the company and the board will take a suitable decision when the right time comes for the utilization of this fund," he explained. The balance overdue receivable will be $227 million, which is net of tax.
On the standalone entity, Nava, the debt is around Rs 100 crore. Overall debt as of today is $412 million. "Once we get the arbitration proceeds, we will be able to retire almost 50 percent of this debt and for the balance 50 percent, we will be in touch with lenders to see if we can reach some kind of settlement to restructure the debt and to make it in line with the revenue receipts," he said.
The stock surged 9 percent. It was up 19.95 percent in last week and 22.24 percent in the past month.
For the entire interview, watch the accompanying video
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