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PG owns 60 percent of Mutare Board through its wholly-owned subsidiary, Zimboard, while 40 percent is owned by PG Bison of Mauritius, the leading particle board producer in Africa, part of the Steinhoff Group of South Africa.
Market sources said PG Bison and Old Mutual had agreed to invest in the business, in which PG would be a minority shareholder.
PG, listed on the ZSE, decided it would be a minority shareholder in Manica Board, to focus on more profitable businesses.
“PG Bison, part of Steinhoff, and Old Mutual are expected to invest in Manica Board, which would dilute PG shareholding,” said one source, speaking on condition of anonymity. “The figure will be around US$10 million.”
PG could not disclose details on the latest developments
“We have issued a cautionary statement on the negotiations regarding the recapitalisation of Manica Board and Doors (Pvt) Limited,” said PG company secretary Kudakwashe Waniwa.
“As a result, we cannot issue any further details regarding these negotiations. An update will be communicated through the Press at the opportune time.”
But the company had already indicated that Manica Board would not be consolidated into the 2011 accounts as PG Bison and potential investors would dilute PG shareholding in Manica Board after recapitalisation.
Manica Board is involved in the production of board products for local and regional markets.
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.
The Johnson & Fletcher branch in Harare was also closed down. The group is looking for potential buyers for the discontinued PG Safety Glass manufacturing operations in Mutare.
Bongani Ndlovu