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Rutendo Nyeve,Zimpapers Reporter
LISTED retail giant, OK Zimbabwe Limited, is forging ahead with plans to raise an additional US$10.5 million through the sale of some of its immovable properties, with offers received last month under consideration by the board.
The move is set to stabilise business operations and return the retail giant into profitability.
The latest capital initiative follows a successful US$20 million rights issue concluded in July, as the company battles to recover from a period of significant financial distress highlighted by a US$29.6 million loss for the year ended March 31, 2025.
The property disposal strategy, detailed in the Group’s Unaudited Abridged Financial Results released on Tuesday, involves a sale and leaseback arrangement for supermarket buildings.
The model will allow the group to unlock capital from its assets while ensuring it retains its presence in crucial retail locations.
In a statement accompanying the financial results, OK Zimbabwe Board Chairperson, Mr Herbert Nkala, outlined the rationale behind the aggressive capital-raising measures.
“A rights issue exercise was successfully concluded in July 2025 and US$ 20 million proceeds 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 on a sale and leaseback basis. The leaseback arrangement is necessary to ensure the group continues to operate in its strategic store locations,” said Mr Nkala.
He further explained that some of the funds raised will be applied to settle part of the group’s debt and this is expected to unlock supplier credit support for restocking.
The group’s financial performance for the year shows the challenges faced. For instance, group revenue declined by 53 percent to US$240 million, a contraction attributed to a storm of economic headwinds.
“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,” reads the report.
These were exacerbated by the group’s inability to settle suppliers on time, leading to stock shortages as some suppliers withheld deliveries or demanded upfront payment.
While stringent cost containment measures led to a 51.21 percent reduction in overheads, this was insufficient to offset the drastic revenue decline.
The group was also forced to recognise a US$10.3 million impairment on some of its stores, as constrained operations reduced their recoverable value.
A net exchange gain of US$13.5 million, arising from the re-measurement of liabilities following the devaluation of the Zimbabwe Gold (ZWG), provided some cushion but could not prevent the substantial overall loss.
Mr Nkala acknowledged the deep-seated nature of the company’s challenges but expressed confidence in the recovery path being pursued by the board and management.
“The board and management’s initial focus has been to stop the decline in performance and financial distress and to steer the business back to stability, profitability and long-term sustainability,” he said.
“The process of restructuring the group for survival and growth has already started to ensure proper management of debt to avoid insolvency, it operates with an appropriate organisational structure, efficient operations and that it adapts to changing market conditions,” said Mr Nkala.
The human resource impact of the downturn was also noted, with Mr Nkala highlighting the loss of trained personnel to better opportunities.
He indicated that retraining existing staff would be essential to raise customer service standards once the Group is fully resourced.
Looking ahead, the focus will remain on cost optimisation and enhancing both in-store and online sales strategies.
While the road to recovery is expected to be lengthy, Mr Nkala said the board believes that with proper focus and diligence, the goal of delivering consistent returns to shareholders in the medium term is attainable.
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