OK Zim Seeks US$30 Million Capital Injection to ...

OK Zim Seeks US$30 Million Capital Injection to Stabilise Operations

Witness Runodada- Zim Now Reporter

OK Zimbabwe Limited has announced that it is facing significant financial and operational challenges due to a difficult economic environment. The company revealed that these difficulties have affected its ability to meet financial obligations, particularly payments to suppliers and financial institutions.

“The company has been experiencing significant operational and financial difficulties arising from both internal and external factors,” the statement read. “These challenges have impacted the company’s ability to meet its financial obligations, particularly payments to suppliers and financial institutions.”

According to OK Zimbabwe, the challenging environment has been characterized by macroeconomic volatility, including exchange rate fluctuations and inflationary pressures that have driven up costs. The company also highlighted liquidity constraints, which have affected consumer spending and the business’s ability to generate cash flows. Additionally, supply chain disruptions have led to product shortages, negatively impacting sales and revenue.

The company admitted that maintaining stock levels has become increasingly difficult, as many suppliers are no longer able to provide goods due to outstanding unpaid balances. “This has directly impacted product availability across the company’s stores, affecting revenue generation and overall business performance, particularly in the last six months, where trading levels were not adequate to cover costs,” it stated.

As a result, OK Zimbabwe expects to record a significant loss for the financial year ending March 31, 2025. In response to these difficulties, the board of directors has approved a capital raise of up to US$30 million to bridge the funding gap and stabilize the company’s financial position. The initiative will include a combination of a rights issue, private placement, and debt instruments.

“The capital-raising initiative is expected to strengthen the company’s balance sheet and liquidity position, enhance working capital availability to ensure smooth business operations, and support the company’s strategic turnaround plan,” the company announced.

OK Zimbabwe assured its shareholders and the investing public that further details on the capital-raising process will be disclosed in due course. The company plans to publish a circular to shareholders, along with a notice of an Extraordinary General Meeting, where the proposal will be discussed and approved.