The future of Portland Holdings Zimbabwe (Porthold) hangs in the balance, with its fate scheduled for decision in July after the unbundling of its South African based holding company, Pretoria Portland Cement (PPC) from the Barloworld Group.
In the presentation of its results, the PPC continued to ringfence Porthold from its group’s financial results, saying Porthold’s management had lost effective control of the business.
Porthold, owned 100% by PPC, whose unbundling is geared to make way for black economic empowerment partners in South Africa later this year, saw it deconsolidate Porthold’s results from its own.
Barloworld is the majority shareholder in PPC, but has sought to dispose of non-core operations to concentrate on motor, equipment, logistics and materials handling businesses.
It said the lack of foreign currency to import components for the maintenance of its critical infrastructure had cast doubts over the future of Porthold, whose interim half year results were far from impressive.
Auditing and accounting experts saying the deconsolidation reflects waning confidence in Porthold’s continuance as a viable business.
"People view such financials as fairly meaningless. They could be a protest statement, at the very least, but what PPC could be saying is that it no longer has confidence in the going concern status of Porthold," said one partner with a leading audit firm. The company posted an attributable loss of $750 million (R3 million) after tax, at the prevailing official rate of R1:$35,75.
But it appears that PPC has already started to make moves to dispose of Porthold, with the company saying progress is being made on the planning and design of the 1,25 million tonnes per annum Riebeeck expansion and modernisation programme.
PPC only managed to set-off dividends received from Porthold against the carrying value of the investment, which was accounted for on a fair value investment basis after an average fall of 90% in Porthold’s value from the values recorded at the company’s year-end last September.