Masawara directors get nod to raise US$23,5m

102 564 ordinary shares.
The company, in which Mr Shingi Mutasa is the majority shareholder, approved the fund-raising during the company’s extraordinary general meeting last week.
According to the company, proceeds of the share placement would be used to fund the proposed acquisition of an interest in chrome mining and smelting operations in the country.
“The new ordinary shares will rank pari passu with the existing shares of the company. Following this allotment, the total issued share capital of the company will increase to 123 465 409 ordinary shares with voting rights,” said the company statement to shareholders.
Accordingly, new ordinary shares may be used by shareholders with in the company as the denominator for the calculations by which they will determine if they are required to notify their interest if there is a change in their interest.
Share placement is the sale of securities to a relatively small number of selected investors as a way of raising capital.
Investors involved in private placements are usually large banks, mutual funds, insurance companies and pension funds. Share placement is the opposite of a public issue, in which securities are made available for sale on the open market.
Masawara added that the mining operation had extensive mining claims in Zimbabwe, predominantly in the chrome belt, and it was intended to surface mine viable claims.
The company said a memorandum of understanding has already been signed and detailed due diligence was underway. Total investment was not expected to exceed US$12,1 million.
The Zimbabwe-focused investment vehicle also said part of the funds would be used to increase its interest in its already existing investments and drive value enhancing restructuring and re-organisation strategies within these investments.
Masawara’s recent acquisition, Terelix Communications, intends to expand its services to include the wholesaling of international bandwidth to corporate customers and other Internet service providers in Zimbabwe and the establishment of fixed, nomadic and ultimately fully mobile broadband services via fibre optic and WiMAX network architecture.
In January, the group acquired 50 percent of Terelix, which holds a licence to construct, operate, develop and maintain a public data internet access and Voice over Internet Protocol (VoIP) network in Zimbabwe.
Terelix has a 20-year capacity purchase agreement with a local long-distance dark fibre operator, to connect its network operations centre in Harare to the SEACOM East African fibre optic cable that terminates on the Mozambique side of the Forbes Border Post in Mutare.
Telerix also plans the rollout of a Fourth Generation (“4G”) network to provide a “last mile” solution for Internet customers initially in Harare and then to the other main centres in the country.
In its results for the year to December, Masawara recorded a loss of US$2,2 million.
The company said its performance was adversely affected by the imputing of interest on shareholders’ loans that were capitalised prior to listing, along with a poor performance by associate company, TA Holdings.
Last month Masawara successfully completed the acquisition of BP Zimbabwe (Pvt) Ltd and Shell Zimbabwe (Pvt) Ltd.
Collectively, BP Zimbabwe and Shell Zimbabwe own some of the largest petroleum product infrastructure in Zimbabwe, with one of the widest distribution networks comprising in excess of 70 retail sites and 10 depots.
The acquisition was financed through a combination of internal cash resources and third-party structured funding arrangements.
Masawara will hold an effective 51 percent.