Struggling PG secures Indian investor

HARARE - PG Industries Zimbabwe (PG) is moving to sell about 8, 6 billion shares to an Indian investor for $500 000 as the group’s shareholders seek to divest from the struggling firm.

PG scheme of arrangement chairperson Moses Chinhengo yesterday said the company’s shareholders were set to meet next month to discuss the disposal to Dewei Investments Limited (Dewei).

“As ordinary resolutions...The members shall approve the composite secondary scheme. The members shall also specifically approve the sale by members, to Dewei Investments Limited of their entire 8,640,860,097 shares in PG for a consideration of

$500 000 or 0,0058 cents per share,” Chinhengo said.

At the upcoming meeting, PG shareholders will also waive rights of pre-emption to purchase shares in the issued share capital of the company pursuant to the sale of shares by members, to the investor.

The company, which has a market capitalisation of $478 330, has 478,3 million issued shares.

“Members shall authorise the directors to do all such things as they may consider necessary or desirable to give effect to or pursuant to or in connection with the Scheme of Arrangement,” Chinhengo said.

The group — which failed to meet its April quarterly payments to creditors under its scheme of arrangement will also have its shareholders approve a referred creditors’ scheme; and a concurrent creditors’ scheme at the August meeting.

PG, which owes various creditors nearly $12 million, has also been in negotiations with Dewei for the firm to acquire or invest in the fraught company.

The firm’s director, in an April statement, said they were moving to recommend that shareholders take the Dewei offer, following an evaluation of the offer’s impact.

“Following subsequent discussions and negotiations, directors have now received a written offer from the prospective investor to acquire the entire share capital of PG, invest an additional amount to make a once -off final settlement to creditors and provide working capital and funds required for replacement and refurbishment of production equipment,” the firm’s directors said.

While the group’s 2014 and 2015 audited financial statements are to be released, PG’s merchandising’s performance continues to be adversely affected by poor stocking levels.

The group’s Zimtile’s production and sales volumes have been increasing on the back of higher capacity utilisation.

Early last year, the ailing company announced plans of converting a total $7,1 million debentures into equity, noting that the conversion, at a price of $0,001, would include accrued and unpaid interest.

The $7,1 million comprises $6,72 million capital and $415 681 interest.

Comments (3)

Once great company destroyed by poor management just like the country

bexilford - 16 July 2016

Indian investors no good at all. Remember Essar deal at Zisco, useless earth moving equipment at Hwange Colliary Mine etc .

Jeep Mango - 16 July 2016

The poor journalist has no knowledge whatsoever of what he/she is talking about. The journalist did not have enough information. At least it was prudent to do enough research before going to print. It is always critical for such esteemed papers to have journalist who report the truth and who do enough research before going to print. It seems my dear journalist got all information from a bottle store or from inside a combie. How can PG be sold for $500K? PG does not owe creditors $12million. There nothing wrong with any type of investor be it African, Asian, American or European.

Fio Massive - 20 July 2016

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