PG to meet creditors

HARARE - Building materials maker, PG Industries Zimbabwe (PG), is set to meet its creditors to craft a scheme of arrangement as part of efforts to relieve its debt burden.

The meeting — scheduled for January 24 — will among other things, allow creditors to either take ordinary shares in the group or accept a deferred payment plan to settle amounts over a 36 month period.

PG wants to convert $5,9 million debentures into capital, $18,7 million owed to creditors into capital and embark on $3,5 million rights issue.

The perennial loss making entity ? which was recently suspended from trading on the Zimbabwe Stock Exchange due to continued non-performance — posted a $2,4 million loss in the half year to June 30, 2013, worsening from a $2,7 million loss incurred in prior comparable period due to high level of borrowings.

In a statement accompanying the group’s results, PG said net revenue increased by 11 percent to $17 million on the backdrop of softening demand and tight liquidity conditions.

“Competitive pressure, particularly at the merchandising division, resulted in the overall group gross margin percentage declining from 31 percent to 27 percent.

“Net operating expenses declined by 10 percent. Loss before interest and tax declined to $842 245 from $2 million in 2012,” the company said.

Sales for the merchandising division grew by four percent to $11 million, while finance charges for the group amounted to $1,4 million.

“The tight liquidity conditions and competitive pressure that prevailed in the market negatively impacted on the performance of the division.

“Subdued business activity is expected to continue for the remainder of the year.

“However, innovative supply agreements with both local and foreign suppliers have resulted in significant improvements in accessing key products for the group to distribute through its branch network,” PG said.

During the period under review, Zimtile sales increased by 29 percent to $4,6 million due to strong demand for concrete, roofing tiles, bricks and pavers while PG Glass sales increased by 22 percent to $1,5 million on the back of an improvement in stocking levels.

The group revealed that current liabilities exceeded current assets by $8,9 million from $6,8 million in December 2012.

“The conditions give material uncertainty that may cost significant doubt that the group’s ability to continue as a going concern and therefore may not be able to realise its assets and discharge its abilities in the ordinary course of business,” the group said.

The company disposed off 18,9 percent of its 27,9 percent investments in Manica Boards and Doors and the remainder will be for the group’s investment.

The group in a statement reported that it managed to dispose of some of its investment in shares and part of loan investments with a book value of $2,4 million, however, continued liquidity problems in the market slowed the sale of properties held for sale.


Comments (1)

I used to blame the incompetent Hilary munyati and the imbecile in HR. I have been proven wrong. There is absolutely no BOARD at PG because if there was a sane board they could not have listened to Hilary's childish stories for over 3 years. That guy is a total failure.

Truth - 6 January 2014

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