{"id":32779,"date":"2025-04-02T17:09:35","date_gmt":"2025-04-02T17:09:35","guid":{"rendered":"https:\/\/www.premium-partners.net\/?p=32779"},"modified":"2025-04-03T06:18:23","modified_gmt":"2025-04-03T06:18:23","slug":"ok-zimbabwe-seeks-30-million-capital-raise-amid-financial-struggles","status":"publish","type":"post","link":"https:\/\/www.premium-partners.net\/fr\/builder\/ok-zimbabwe-seeks-30-million-capital-raise-amid-financial-struggles\/","title":{"rendered":"OK Zimbabwe seeks $30 million capital raise amid financial struggles"},"content":{"rendered":"

This post<\/a> was originally published on this site<\/a><\/p>

<\/p>\n

Tawanda Karombo<\/span><\/p>\n

Zimbabwe\u2019s largest but struggling retail operator, OK Zimbabwe, is seeking to raise $30 million (around R560m) in capital to strengthen its balance sheet, enhance working capital and to support its turnaround after profitability tanked amid a worsening economic environment.<\/span><\/p>\n

OK Zimbabwe also runs Born Marche and some Food Lovers’ outlets in the country. Recently, the company sacked its CEO and other officials, and brought back retired executives to help turn around its fortunes.<\/span><\/p>\n

As part of its turnaround strategy, the troubled retail operator will undertake a capital raise <\/span>of up to $30<\/span>m \u201c<\/span>to bridge the funding gap and stabilize the <\/span>c<\/span>ompany\u2019s financia<\/span>l\u201d <\/span>position<\/span>, it said on Wednesday.<\/span><\/p>\n

\u201c<\/span>The capital raise will be a<\/span> <\/span>combination of a rights issue, private placement and debt instruments<\/span>,\u201d said Margaret Munyuru, company secretary for OK Zimbabwe.<\/span><\/p>\n

The funds will be used to \u201censure smooth business operations\u201d and strengthen the company\u2019s balance sheet and liquidity position.<\/span><\/p>\n

After \u201cexperiencing significant operational and financial difficulties arising from both endogenous and exogenous factors, driven by a challenging operating environment,\u201d OK Zimbabwe has seen its financial performance nosedive.<\/span><\/p>\n

It blamed this on a difficult operating environment characterized by \u201cmacroeconomic volatility, including pricing issues related to the exchange\u201d rate. <\/span><\/p>\n

OK Zimbabwe argues that informal players that now dominate Zimbabwe\u2019s economy \u201coperated without this constraint, giving them a competitive\u201d advantage.<\/span><\/p>\n

\u201cAdditionally, inflationary pressures have impacted cost structures and pricing strategies. Liquidity constraints in the broader economy (affected) consumer spending and the company\u2019s ability to generate sufficient cash flows and working capital challenges leading to disruptions in supply chain and reduced stock availability,\u201d added Munyuru.<\/span><\/p>\n

The firm has thus been unable to maintain adequate stock levels as many suppliers can no longer continue providing goods and services due to outstanding unpaid balances.<\/span><\/p>\n

\u201cThis has directly impacted product availability across the company\u2019s stores, affecting revenue generation and overall business performance,\u201d Munyuru said.<\/span><\/p>\n

These challenges have been more pronounced in the last six months under which \u201ctrading levels were not adequate\u201d to cover costs.<\/span><\/p>\n

These challenges have impacted the company\u2019s ability to meet its financial obligations, particularly payments to suppliers and financial institutions. Consequently, OK Zimbabwe \u201canticipates making a significant loss\u201d for the year ended 31 March 2025.  <\/span><\/p>\n

Volumes and revenue in top Zimbabwean retailer, OK Zimbabwe fell by 36% during the lucrative quarter to end of December<\/span>.<\/span><\/p>\n

Suppliers to Zimbabwean retailers also insisted \u201c<\/span>on shorter trading terms and in some cases prepayments for supplies invoiced in local\u201d currency. This exerted pressure on OK Zimbabwe\u2019s working capital and necessitated the need to access short-term funding.<\/span><\/p>\n

Compared to the same period a year earlier, volumes for the December quarter decreased by 36%, with the reduction in volumes translating to revenues declining by a similar margin.<\/span><\/p>\n

Further worsening the operating environment was a largely subdued consumer spend. The period was marred by acute local currency liquidity shortages restricted access to the much needed funding for the company to cover working capital cycles.<\/span><\/p>\n

\u201cThe local currency unit, ZWG, experienced a sharp devaluation at the end of September 2024 as monetary authorities sought to improve the viability of the exchange rate system for the broader economy,said the company,\u201d said the company.<\/span><\/p>\n

\u201cInvariably, the devaluation had the net effect of nearly doubling existing US dollar denominated obligations in loans and creditors\u2019 balances.\u201d <\/span><\/p>\n

BUSINESS REPORT<\/strong><\/p>","protected":false},"excerpt":{"rendered":"

Tawanda KaromboZimbabwe\u2019s largest but struggling retail operator, OK Zimbabwe, is seeking to raise $30 million (around R560m) in capital to strengthen its balance sheet, enhance working capital and to support its turnaround after profitability tanked amid a worsening economic environment.OK Zimbabwe also runs Born Marche and some Food Lovers’ outlets in the country. Recently, the company sacked its CEO and other officials, and brought back retired executives to help turn around its fortunes.As part of its turnaround strategy, the troubled retail operator will undertake a capital raise\u00a0of up to $30m \u201cto bridge the funding gap and stabilize the\u00a0company\u2019s financial\u201d\u00a0position, it said on Wednesday.\u201cThe capital raise will be a\u00a0combination of a rights issue, private placement and debt instruments,\u201d said Margaret Munyuru, company secretary for OK Zimbabwe.The funds will be used to \u201censure smooth business operations\u201d and strengthen the company\u2019s balance sheet and liquidity position.After \u201cexperiencing significant operational and financial difficulties arising from both endogenous and exogenous factors, driven by a challenging operating environment,\u201d OK Zimbabwe has seen its financial performance nosedive.It blamed this on a difficult operating environment characterized by \u201cmacroeconomic volatility, including pricing issues related to the exchange\u201d rate. OK Zimbabwe argues that informal players that now dominate Zimbabwe\u2019s economy \u201coperated without this constraint, giving them a competitive\u201d advantage.\u201cAdditionally, inflationary pressures have impacted cost structures and pricing strategies. Liquidity constraints in the broader economy (affected) consumer spending and the company\u2019s ability to generate sufficient cash flows and working capital challenges leading to disruptions in supply chain and reduced stock availability,\u201d added Munyuru.The firm has thus been unable to maintain adequate stock levels as many suppliers can no longer continue providing goods and services due to outstanding unpaid balances.\u201cThis has directly impacted product availability across the company\u2019s stores, affecting revenue generation and overall business performance,\u201d Munyuru said.These challenges have been more pronounced in the last six months under which \u201ctrading levels were not adequate\u201d to cover costs.These challenges have impacted the company\u2019s ability to meet its financial obligations, particularly payments to suppliers and financial institutions. Consequently, OK Zimbabwe \u201canticipates making a significant loss\u201d for the year ended 31 March 2025. \u00a0Volumes and revenue in top Zimbabwean retailer, OK Zimbabwe fell by 36% during the lucrative quarter to end of December.Suppliers to Zimbabwean retailers also insisted \u201con shorter trading terms and in some cases prepayments for supplies invoiced in local\u201d\u00a0currency. This exerted pressure on\u00a0OK Zimbabwe\u2019s\u00a0working capital and necessitated the need to access short-term funding.Compared to the same period a year earlier, volumes\u00a0for the December quarter\u00a0decreased by 36%, with the\u00a0reduction in volumes\u00a0translating to revenues declining by a similar margin.Further worsening the operating environment was a largely subdued\u00a0consumer spend. The period was marred by acute local currency liquidity shortages restricted access to the much needed funding\u00a0for the company\u00a0to cover working capital cycles.\u201cThe local currency unit, ZWG, experienced a sharp devaluation at the end of September 2024 as monetary authorities sought to improve the viability of the exchange rate system for the broader economy,said the company,\u201d said the company.\u201cInvariably, the devaluation had the net effect of nearly doubling existing US dollar denominated obligations in loans and creditors\u2019 balances.\u201d\u00a0BUSINESS REPORT<\/p>","protected":false},"author":1,"featured_media":32781,"comment_status":"open","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-32779","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-builder"],"_links":{"self":[{"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/posts\/32779","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/comments?post=32779"}],"version-history":[{"count":1,"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/posts\/32779\/revisions"}],"predecessor-version":[{"id":32780,"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/posts\/32779\/revisions\/32780"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/media\/32781"}],"wp:attachment":[{"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/media?parent=32779"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/categories?post=32779"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/tags?post=32779"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}