adminPG has not recorded a profit since dollarisation in 2009.
Company secretary Mr Kudakwashe Waniwa said the group would dispose of US$5,15 million in assets and realise US$4,35 million from its investment and loan to an associate company.
PG’s investment in Manica Boards and Doors is valued at US$2,9 million while loan to the same company stands at US$1,3 million.
Mr Waniwa disclosed the initiative in a statement accompanying the group’s results for the interim period to June 30, 2012, during which PG suffered a US$2,7 million loss.
The asset disposals and loan recovery are expected to complement a product supply agreement that PG recently concluded to cover its import requirements.
“Discussions are (also) in progress to conclude a long-term business process outsourcing agreement,” said Mr Waniwa.
A transaction funding relationship was established, which will provide access to imported products to the tune of US$2,1 million.
This will culminate in an outsourcing contract to be signed in the last quarter of the year and a credit limit increase to US$4 million.
“Successful conclusion of the business process outsourcing will have material impact on medium- and long-term performance of merchandising and glass divisions,” he said.
The supplies would eliminate the stocking challenges at PG Merchandising and Plate Glass Company of Zimbabwe.
This comes on the back of a US$2,7 million loss that it suffered in the interim to June 30, 2012.
Mr Waniwa said PG’s loss narrowed from US$3,1 million in the same period last year, but low merchandising volumes and high interest weighed down on the group’s financial results.
“The performance of the merchandising division was constrained by lack of adequate working capital,” Mr Waniwa said.
PG recorded a 16 percent decline in revenue to US$15,2 million in the period under review and attributed this to non-consolidation of Manica Boards and Doors’ results and a drop in volumes at PG Merchandising during that period.
Due to financial constraints, PG failed to follow its rights during cash call initiative for Manica Boards and Doors and saw its 60 percent stake whittled down to 27,9 percent. The rights offer saw Manica Boards and Doors recapitalised to the tune of US$10,4 million early this year.
Dismal financial performance over the past three years has prompted 20 percent shareholder BancABC to consider divesting, but cautiously to preserve PG’s share value.
The persistent losses raised concern last year over the firm’s going concern status when current liabilities exceeded current assets by US$10,2 million by June last year. This dropped to US$6,7 million by June this year.
Online Reporter