Mauritius firm snaps up 59,4pc Zimplow stake

HARARE - Mauritius-based Sino Properties (Proprietary) Limited (Sino Properties), is now the majority shareholder in Zimplow after snapping up a 59,4 percent stake in the agro-industrial concern.

Sino Properties increased its stake in Zimplow after underwriting a $5 million rights issue, which was under-subscribed. 

Maxwell Chinorwadza, the Zimplow Company Secretary said the renounceable rights offer had 77,8 million shares of a nominal value of $0,0004 each.

The shares were trading at $0,0642 per rights offer share on the basis of one rights offer share for every two ordinary shares held at the record date.

The rights issue had a 40,53 percent subscription level, this translated to the underwriter taking position 59,47 percent.

Out of the total number of rights offer shares (77 840 000), the ordinary rights offer shares subscribed amounted to 31 548 469, while ordinary shares issued to the underwriter were 46 291 531.

1 947 040 additional ordinary shares were issued to Sino Properties as payment of underwriting fees pursuant to the underwriting agreement.

Sino Properties is an investment vehicle domiciled in Mauritius. It represents a Singaporean company which has interests in mining. The Singaporean company has other interests in the country.

The $5 million rights issue was aimed at reducing expensive short-term debt.

The company’s total debt stood at $13,15 million as at October 31, 2014, with $8,4 million of it being short-term at a cost of 11 percent. Zimplow is paying close to $1,3 million annually in interest charges.

Group chief executive, Zondi Kumwenda is on record saying the legacy debt was assumed when the group took over Tractive Power Holdings (TPH) in 2012.

At the time, Zimplow raised $11 million through a rights issue to finance the purchase of TPH.

Last year, Sino Properties initially increased its shareholding in Zimplow following the foreclosure of part of the stake held by Tetrad.

Tetrad held a 43,2 percent stake in the group but a lot of those shares were placed as security for non-performing loans. The majority of the shares have now been foreclosed by various creditors. More that two years ago Tetrad was offered 11 cents for its stake but turned it down.

Zimplow’s recent restructuring saw the group disposing of non-core assets, while it pounced on farm implements distributor, Tractive Power Holdings.

The company acquired a 57,2 percent stake in Tractive Power after raising $11,2 million through a rights issue in August 2012.

Last year, the agro-implements manufacturer disposed its remaining non-core assets to raise funds to reduce borrowings.

The group, which had offloaded its engineering unit Tassburg together with motoring subsidiary Puzey & Payne for nearly $2 million, also sold its property in the Harare CBD along Robert Mugabe Road for $3,2 million.

 

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