adminmedium-term loan has been secured to recapitalise the business.
Before the transaction, PG Industries owned 60 percent in Manica Board through its wholly-owned subsidiary, Zimboard, while PG Bison, part of Steinhoff of South Africa, owned the remainder.
Now, PG Industries shareholding has been reduced to 28 percent while PG Bison will have 32 percent in Manica Board, a company involved in the produc- tion of wood products for the local and regional markets.
Private placement is the sale of securities direct to institutional investors, such as banks, mutual funds and insurance companies.
PG decided to be a minority shareholder in Manica Board to focus on businesses that have made money in the past.
It indicated that Manica Board would not be consolidated into the 2011 accounts as the potential investors would dilute its shareholding.
“The deal has been concluded,” said a source familiar with the transaction. It was a combination of private placement while US$4 million was secured as medium- term loan,
“The next thing would obviously be restructuring to ensure viability in the company is restored.”
In the region, the company exports mainly to South Africa, Botswana, Mozambique, Democratic Republic of Congo, Zambia, Malawi, Namibia, Tanzania and Kenya.
Last year, PG discontinued non-performing businesses and branches, including the PG Safety Glass, whose operations in Mutare ceased.
J&F branch in Harare was also closed down. The group is scouting for potential buyers for the discontinued PG Safety Glass manufacturing operations in Mutare.
Efforts to get official comments on the latest developments from both Old Mutual and PG Industries were unsuccessful.
Online Reporter