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Business Reporter
A private investor, Dewei Investments Limited, is set to acquire the entire shares in building material supplier PG Industries Limited for a purchase price of $500 000. The full background of the new investor into troubled PG Industries was not immediately available, but the new investor will get PG shares at $0,0058 cents per share.Building materials supplier, PG Industries Zimbabwe, will convene a meeting of members seeking their permission for the sale and to pay off its liabilities at a discount.
“The members shall 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.”
“All members shall waive their 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,” PG said in a statement of an extraordinary and scheme meeting.
If members approve the transaction, current shareholders, previously listed as Stanchart Nominees, Old Mutual Life and Second Nominees, will give up their stakes.
PG has been battling financial challenges, which saw it turning to a scheme of arrangement with secured suppliers, concurrent creditors and debenture holders.
The scheme arrangement was meant to chart the part to turnaround of PG.
Apart from the first scheme of arrangement with creditors and debenture holders, PG had restructured its business to cut costs and concluded favourable terms with suppliers. The building materials supplier has been battling significant decline in demand for its range of products, despite the relative boom in construction activities in the country. Efforts to turnaround the company have at time shown promise to change its fortunes, but have not quite had the desired effect, as funding remained a challenge.
The High Court gave the order on July 6 for holding of scheme meetings to seek members nod to discount outstanding payments to creditors and some of the workers.
The meeting tentatively set to be held under the supervision of Justice Moses Hungwe shall be convened at the High Court on the 5th of next month (August 5 2016). The meeting incorporating an extraordinary general meeting of the company will approve the scheme for secured lenders, concurrent and preferred creditors.
PG will also seek authority from members to pay workers who are owed nine months salary a third of their dues and those owed less than three months will be paid pro rata.
“The balance will be paid on the terms applicable to concurrent creditors,” PG said.
PG has also proposed to pay all outstanding concurrent creditors at the rate of 19,76 cents for every dollar owed as part of the full and final payment to the creditors.
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