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As part of a broader turnaround strategy aimed at restoring their competitiveness and operational strength, OK Zimbabwe is in the process of securing USD$30 million capital rise. The capital raise will involve a blend of a rights issue, private placement, and debt instruments.
Last month, the company announced that the new capital would be used to close a growing liquidity gap and stabilise its financial position, which has been under constant pressure from a combination of macroeconomic shocks and internal inefficiencies.
By Gamuchirai Mapako
Company Secretary Margaret Munyuru confirmed that the capital raising process is almost its final stages.
“…discussions regarding the proposed capital raise in the sum of up to US$30m are now at an advanced stage,” said Munyuru.
The company, which owns one of the country’s largest grocery chains, has been struggling to stay afloat given Zimbabwe’s unstable and inflation-ravaged economy. A combination of soaring input costs, recurrent power outages, foreign currency shortages, and a steep reduction in consumer purchasing power have all been responsible for conspired for battering the group’s profitability and damaging its grand brand image.
Mrs. Munyura added that more specific details of the transaction would be revealed soon and that shareholders would be provided with the necessary documentation, including a circular and a notice for an Extraordinary General Meeting (EGM) to approve the initiative.
“The company will then publish a circular to shareholders incorporating notice of an Extra General Meeting of Members for the purpose of considering and approving the capital raise,” Munyuru said.
Munyuru concluded her latest cautionary note with a reminder to shareholders to continue exercising care in trading the company’s shares while the capital raise is in motion.
“Shareholders and the investing public are advised to continue exercising caution when dealing in the Company’s shares. Further announcements will be made in accordance with regulatory requirements and when there are material developments,” she said.
If OK Zimbabwe successfully completes the fundraising and effectively deploys the capital, they could have one of the biggest retail comeback stories in Zimbabwean corporate history. However, if they fail, this might speed up the plunge into additional difficulty.
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