British American Tobacco (BAT) Zimbabwe is continuing to manage a liquidity squeeze linked to legacy foreign-currency obligations, with the cigarette maker warning that long-dated Treasury Bills (TBs) received in settlement of blocked funds cannot provide short-term operating cash.
The company’s half-year financial statements show that it remained in a net current liability position of ZWG71.4 billion as at 30 June, although this was an improvement from ZWG96.1 billion at the end of 2025.
The position reflects legacy obligations relating to dividends and imported goods under the country’s former blocked-funds arrangements.
In September 2025, the Reserve Bank of Zimbabwe approved and registered blocked funds amounting to US$16.4 million, equivalent to ZWG439 million at the stated exchange rate.
BAT subsequently received US dollar-denominated government TBs with a face value of ZWG439 million in settlement of the claim.
The instrument matures on 19 September 2050.
While the settlement removed uncertainty around the outstanding claim, the company said the TBs did not resolve its immediate liquidity requirements.
“The long-dated government TB is not a source of short-term operating liquidity,” BAT said.
The issue has left working-capital management firmly on the agenda as BAT balances supplier obligations, foreign-currency requirements and its operating needs.
In assessing its ability to continue as a going concern, the group’s directors considered cash-flow forecasts and downside scenarios, alongside the company’s ability to generate cash and meet foreign-currency obligations.
BAT said it was responding through tighter cash and working-capital management, including the collection of receivables and conversion of inventory into cash.
It is also managing foreign supplier obligations and foreign-currency requirements while continuing to fund operations and capital expenditure from internal resources.
The directors said future distributions would be considered against operating requirements and available liquidity headroom.
“Disciplined cash and working-capital management” was among the measures identified by the board in its assessment.
Despite the current liability position, the directors concluded that the group had adequate resources to meet obligations as they fall due.
“No material uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going concern,” they said.
BAT Zimbabwe manufactures and distributes cigarettes through independent retailers, wholesalers and distributors, while also exporting cut-rag.