OK Zimbabwe Launches US$20 Million Rights Offer

Rutendo Mazhindu—ZimNow Reporter

Zimbabwe Stock Exchange-listed retail giant Zimbabwe Limited has launched a US$20 million renounceable rights offer as part of a high-stakes turnaround strategy aimed at reviving operations, settling mounting debts, and restoring supplier confidence.

The rights issue opens on July 21 and closes on August 4, 2025.

The retail group is offering 1,834,982,573 new ordinary shares at a subscription price of US$0.0109 per share on a ratio of 1.37 new shares for every one share held.

The move comes as the company battles a liquidity crisis and a ballooning debt of over US$30 million, of which US$24 million is owed to suppliers, US$5.12 million to service providers, and US$880,000 in statutory obligations.

“Our ability to procure inventory and maintain stakeholder confidence has been severely impaired,” said Group Chief Executive Officer Max Karombo.

“Several creditors have threatened legal action. This rights offer is our path to survival and recovery.”

The recapitalization is being underwritten by the National Social Security Authority (NSSA), Datvest Nominees (Private) Limited, and Old Mutual Life Assurance Company Zimbabwe Limited, who have committed US$16.54 million collectively.

“We believe in the long-term potential of OK Zimbabwe and will support this critical phase of their recovery,” said Grace Mutsindo, acting investment manager at NSSA.

The company will dispose of selected immovable properties to raise an additional US$10.5 million.

These include the OK Mbuya Nehanda branch, Glen View outlet, Birmingham Warehouse, and branches in Gweru and Waterfalls.

“These transactions will enable the purchase of stock, restore supplier trust, and avoid judicial recovery processes that would erode shareholder value,” said company secretary Margaret Munyuru.

The capital raised will be directed towards clearing overdue creditors (US$16.96 million), capital expenditure (US$4 million), working capital (US$8 million), and ICT system upgrades (US$1 million).

The rights issue will increase issued share capital from 1.33 billion to 3.17 billion shares while boosting net asset value from US$78.4 million to US$97.8 million.

The company has already received commitment from shareholders representing 73% of issued share capital to take up their rights.

The rescue package follows a period of sustained financial distress, which saw the closure of several outlets, including the OKmart branch in Willowvale and Bon Marché stores in Chisipite and Borrowdale, as the group struggled with low consumer demand, stock shortages, and disengagement by key suppliers.

“We are committed to delivering consistent, sustainable returns to shareholders,” said Karombo. “This transformation will reposition OK Zimbabwe as a competitive retail player.”