tawandamusarurwa
Online Reporter
LISTED clothing retailer Truworths Limited says it expects an improvement in sales on the back of a recently introduced United States dollar credit facility and an upcoming re-capitalisation programme.
The company suspended credit in local currency last year after the Reserve Bank of Zimbabwe adjusted the bank policy rate to 200 percent in a bid to curb speculative behaviour in the market.
The high interest rate was not only unviable to finance the credit but it was not affordable for customers to service their obligations.
Meanwhile, Truworths has since tabled a re-capitalisation proposal through a rights offer.
The capital will be directed at financing mechanisms that have been devised to ensure business viability, including increasing working capital funding at a sustainable cost in light of the high interest rate environment, opening new-format Truworths chain stores, and improving the product.
In a recent circular to shareholders, Truworths chairperson Mr Mordecai Mahlangu said: “The business introduced US dollar credit with effect from April 1, 2023. This should see an improvement in sales and, together with the re-capitalisation proposal, the balance sheet should strengthen and sustain the underwriting of US dollar credit.”
Bongani Ndlovu