adminOliver Kazunga, Senior Business Reporter
AN Indian firm Dewei Investments, which had proposed to take over PG Industries, has failed to meet the November 30, 2016 deadline to pay off shareholders and creditors.
Last year, the investor took over the entire issued share capital of PG Industries amounting to $500 000 after shareholders overwhelmingly approved the transaction.
Creditors and shareholders approved the sale by members, to Dewei Investments Limited of their entire 8 640 860 097 shares in PG Industries of 0,01 cent each.
The potential investor also agreed to pay all creditors owed by PG Industries and provide working capital for the battling building materials producer and retailer.
In an update on the secondary scheme of arrangement to the Zimbabwe Stock Exchange, PG Industries said:
“The Secondary Scheme of Arrangement was approved by shareholders and creditors on 15 September 2016 and was sanctioned by the High Court on 28 September 2016.
“According to the Circular to Shareholders, Dewei Investments committed to:
Acquire the entire issued share capital of PG Industries (Zimbabwe) Limited; make a compromise offer to creditors for final settlement of all balances as at 31 December 2015 and provide working capital and funds required for replacement and refurbishment of production equipment.”
The building supplier said indications were that, subject to regulatory approvals, payments to shareholders and creditors would be made by 30 November 2016.
“This deadline has not been met. Dewei Investments has advised that no significant progress has been made on applications for required regulatory approvals, including exchange control, and has requested for additional time to implement the scheme.
“The board is engaging Dewei Investments directors and a further update will be made before December 31, 2016,” it said.
PG Industry’s shares were suspended on ZSE in 2013 with observers ascertaining that the company was technically insolvent.
In April 2016, the High Court sanctioned PG Industries’ scheme of arrangement paving way for the firm to unlock fresh capital to revive its operations.
PG had a debt of $21 million and a negative equity position of $13,1 million at the end of last year, and was in dire need of working capital. —
@okazunga.
Online Reporter