Online Reporter
Michael Tome
Business Reporter
OK Zimbabwe Limited says it will sell some of its immovable properties to raise an additional US$10,5 million to support the retail giant’s recovery programme, following a successful rights issue in August this year.
Zimbabwe’s largest store retailer by store network raised US$20 million last month through a fully subscribed renounceable rights offer, that received full shareholder participation and strong underwriting support.
A loss of US$29,6 million for the year to March 31, 2025, demonstrates the scale of the group’s financial and operational challenges.
The asset disposal is part of the group’s broader strategy to raise US$30,4 million to bail out the troubled retailer.
The planned asset disposal entails a sale and leaseback arrangement for supermarket buildings, which would enable OK Zimbabwe to access much-needed funds while maintaining its operational footprint.
Board chairperson, Mr Herbert Nkala, said in a statement accompanying the group’s financial results that the capital-raising measures were aimed at stabilising the company’s operations and returning it to profitability.
The company is working to overcome its financial challenges and position itself for long-term sustainability.
“A rights issue exercise was successfully concluded in July 2025 and US$20 million proceeds were received in August 2025. An additional capital raise plan of US$10,5 million through the sale of immovable properties is in progress, with offers received in August 2025 currently under consideration.
“The properties on sale include supermarket buildings that will be disposed of on a sale and leaseback basis. The leaseback arrangement is necessary to ensure the Group continues to operate in its strategic store locations,” Mr Nkala said.
Success in raising the requisite funding will determine how far the company goes with its turnaround strategy as well as its ability to navigate industry challenges going forward.
Mr Nkala said the funds raised from the property sales would be used to settle part of the group’s debt to unlock supplier credit support, which is important for the company to restock adequately and reboot operations.
OK Zimbabwe’s revenue for the year to March 2025 declined by 53 percent to US$240 million from US$511 million in the same period last year, attributable to supply chain disruption, unstable exchange rate, especially in the first half of 2024.
The lacklustre performance was compounded by heightened competition from the informal sector and exchange rate pressures that distorted pricing.
Supply chain disruptions emanated from the group’s failure to settle suppliers’ accounts on time, leading to some withholding deliveries while others demanded payment up front.
These challenges resulted in the group’s operational capacity being negatively impacted. However, the group’s overheads reduced by 51,21 percent over the prior year, largely due to tight cost containment measures.
“The decline is attributed to supply chain disruption, unstable exchange rate, especially in the first half of the year, liquidity crunch in the economy, and heightened competition from the informal sector, compounded by exchange rate controls that distorted pricing,” said Mr Nkala.
Amid funding pressures and negative cash flows, capital expenditure was capped at US$0,9 million for the year under review.
Mr Nkala expressed optimism about the company’s future, stressing that OK Zimbabwe would soon recover from its current challenges.
He noted that the board and management were working diligently to address the company’s financial and operational issues, and he was hopeful that their efforts would yield positive results in the near future. He expressed confidence that the company would bounce back stronger and more resilient than before, supported by a clear strategy to drive growth, improve financial stability, and enhance customer satisfaction.
