adminof the shares, resulting in Old Mutual taking up 39,36 percent of the unsubscribed shares.
“The unsubscribed rights offer shares have been taken up by the sub-underwriter, Old Mutual Life Assurance Company Zimbabwe Limited,” RioZim said in a statement.
After assuming the 3,9 million unsubscribed shares, the life assurance company now controls a cumulative 11,8 million shares, representing about 29,6 percent of the company’s issued shares.
The new shares were listed on the Zimbabwe Stock Exchange yesterday. The RioZim counter was US3c firmer to close the day at US58c.
Old Mutual had entered into an agreement with GEM Raintree Investments of Mauritius, the underwriters, to sub-underwrite the rights offer.
The mining giant is seeking to raise US$56,5 million for working capital and to settle expensive short-term debt estimated at above US$55 million.
The group raised US$5 million through a rights issue and an additional US$5 million would be raised through a private placement of 13 325 000 shares to Global
Emerging Markets Raintree and US$45 million through convertible debentures to GEM Raintree.
A convertible debenture is a type of loan issued by a company that can be converted into stock by the holder and, under certain circumstances, the issuer of the bond. By adding the convertibility option, the issuer pays a lower interest rate on the loan than if there was no option to convert.
These instruments are used by companies for the capital they need to grow or maintain the business.
The private placement of 13 325 000 ordinary shares to GEM Raintree represents approximately 24,99 percent of the enlarged share capital after the rights issue.
In the event that holders of the convertible debentures elect to effect conversion, existing shareholders would be diluted, giving rise to GEM Raintree Investment holding 55,96 percent of the issued share capital of the company, making it the major shareholder in the company.
Meanwhile, RioZim says funds derived from the rights offer and private placement will be applied against the settlement of expensive short-term debt and critical capital expenditure and working capital for the operations of Empress Nickel Refinery and Renco.
The capital injection is expected to result in a return to sustainable cashflow position.
Following the departure of managing director Mr Josh Sachikonye, the group announced the appointment of Mr Ashton Ndlovu as its new chief executive effective April 1, 2012.
ZB Financial Holdings group chief executive, Mr Elisha Mushayakarara was also appointed to the RioZim board.
Online Reporter