Masimba unbundles, courts foreign investor

HARARE - Construction firm Masimba Holdings Limited (Masimba) is seeking regulatory approval to unbundle its contracting and manufacturing businesses into two separately listed companies.

Greg Sebborn, Masimba chairman, said the board’s strategy to separate the two divisions is expected to benefit shareholders by making it easier to attract capital for their separate growth profiles.

“The board believes that once unbundled into two separate entities, Masimba and Proplastics will be able to attract capital focused on each business unit,” he said.

“Following the appointments of new boards to supervise the affairs of the unbundled entities, the board believes the new boards will have focused mandates to enable ease of strategy formulation, execution and oversight,” added Sebborn.

Apart from the proposed unbundling, the group is in the process of consummating a new joint venture with Mauritius-incorporated Kosto Holdings Limited (Kosto) to establish a new reinforcement steel cutting and bending company.

Kosto is part of South Africa-based Reinforced Steel Contractors (RSC), one of the region’s leading manufacturer of reinforcement steel.

“The joint venture will enjoy significant forward linkages with Masimba Construction in the future and will be able to exploit supply opportunities in the informal sector,” said Sebborn.

Meanwhile, Masimba’s revenue for the year to December 2014 slumped to $28 million compared to $62,3 million for the 18 months period to December 2013 weighed down by the contracting division which continued to be adversely affected by the negative economic environment.

As a result, a loss of $493 064 was incurred in the period under review from a profit of $1, 3 million prior year.

The group’s gross profit margins improved to 19 percent from 17 percent mainly attributable to the board’s focus on productivity and cost containment strategies.

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