Pioneer banks on Unifreight

Business Reporter
TRANSPORT and logistics firm Pioneer Corporation Africa is pinning its hopes on newly acquired fellow industry player Unifreight Limited to help double revenue once Government approval of the transactions has been secured.
Pioneer Corporation Africa chairman Mr Patrick Chingoka revealed the group’s expectations on the new acquisition after seeing the group’s revenue decline by 9 percent to US$12,6 million in the six months interim to June 2013.

The purchase of Unifreight is yet to obtain regulatory approvals in line with provisions of the country’s indigenisation and economic empowerment laws.

“We are confident that once approval is granted Pioneer Corporation Africa will not only double its revenue but . . . fully utilise synergies that exist and provide a more complete transport and logistics solution to the market,” Mr Chingoka said.

The decline in revenue from US$13,5 million to US$12,3 million resulted in the ZSE-listed group suffering a US$1 million interim loss from US$656 000 profit.

“Management is, however, confident that there will be a turnaround in the last quarter of the year and that this loss will be reduced by year end,” he said.

The Pioneer Corporation chairman admitted that the transport and logistics group had a difficult first six months due to limited liquidity and a challenging environment that prevailed in Zimbabwe during the period under review.

In what reflected little growth in most aspects of the business’ operations, total assets increased only marginally from US$17,8 million to US$18,3 million.

Pioneer Corporation Africa recently submitted an updated compliance proposal of its indigenisation plan and is awaiting Government’s response.

Group chief executive Mr Albert Ushe said the company was hoping to get a response following the appointment of a new Cabinet three weeks ago.

President Mugabe named a 26-member Cabinet after he defeated main opposition MDC-T leader Morgan Tsvangirai while his Zanu-PF won the July 31 harmonised elections, garnering more than two thirds parliamentary majority.

Former Environment Minister Francis Nhema was then appointed Minister of Youth Development, Indigenisation and Empowerment, taking over from Minister Saviour Kasukuwere, who has taken over the rebranded Environment portfolio.

Pioneer acquired Unifreight in a US$7,2 million deal seeking to reposition itself and establish itself as the leading player in the transport and logistics business.

Once all the regulatory approvals are obtained Pioneer is expected to issue a total of 514 974 875 shares for the purchase consideration of US$4 million.

But to make acquisition possible the ZSE-listed firm will need to raise its authorised share capital from 600 million ordinary shares to 1,4 billion ordinary shares.

Pioneer will also take up US$900 000 Unifreight debt, pay US$1,5 million for the Swift brand over five years and pay US$711 000 for Unfreight’s IT system over three years.