adminattractive share value post the acquisition of fellow industry firm Unifreight in a US$7 million deal.
The transport and logistics concern will issue an additional 800 million ordinary shares to take its tally of authorised share capital to 1,4 billion shares.
Consolidation will see the group converting 10 Pioneer Corporation ordinary shares of US$0,001 each to one ordinary share of the group worth US$0,01 each.
This would reduce the group’s authorised share capital from 1,4 billion to 140 million ordinary shares with
106 474 046 of the ordinary shares in issue.
Authorised shares refer to the total number of shares in a company, which a firm may issue or offer or in the event that it needs to raise capital or use as payment.
Shareholders in the group will remain with roughly the same shareholding in the company, save for a slight difference that may result from fractional shares that may arise from numbers not exactly divisible by 10.
In a circular to shareholders, Pioneer said the increase in authorised share capital was meant to give effect to the acquisition of Unifreight, which would receive 514 975 875 shares in the group for the purchase price of US$4 119 807.
But Pioneer reckons the increase in the authorised share capital may result in share price variability, which might make the shares less attractive.
“The rationale for the restructuring of Pioneer’s share capital is to avoid extra administrative difficulties and expenses that will arise as a result of the issuance of a large number of new ordinary shares.
“It is also meant to avoid potential variability in the share price, which may result in the share price being unattractive to investors due to the large numbers of the group’s shares on the ZSE,” said Pioneer.
Pioneer will acquire fellow industry player Unifreight Swift for US$7,2 million in a mega deal meant to restore its position in the transport and logistics business.
The balance adding up to US$7,2 million is made up of US$900 000 Unifreight debt secured on trucks, US$1,5 million for purchase of the Swift brand over five years and US$711 000 for Unifreight IT systems over three years.
The listed group’s shareholders will meet early next month to consider a number of resolutions, chief among them the acquisition of Unifreight Swift and the issuing of more shares to give effect to the acquisition of Unifreight.
The transaction will also depend on the company getting approval from the Zimbabwe Stock Exchange, Competition and Tariff Commission and the Ministry of Youth Development, Indigenisation and Economic Empowerment.
The transport and logistics group’s asset base will increase by US$12 million to US$30 million after the acquisition of Unifreight’s trucks, trailers, vehicles and equipment.
According to the circular, Pioneer saw an opportunity to claw back the market lost during the period of economic instability when it closed its consolidations unit where Pioneer was a major player through Clan Transport.
An economic downturn had seen Pioneer making losses, but a stable political and improved economic environment has seen the group making profits and generating cash in the cross-border freight and passenger operations.
Online Reporter