Pioneer, Unifreight Swift deal almost done

indigenisation requirements remaining to be tied up.
The Herald Business gathered last week that both the Zimbabwe Stock Exchange and the Competition and Tariff Commission had approved the transaction.
Pioneer is listed on the ZSE, but Unifreight is a private limited firm.

Mergers and acquisitions are subject to scrutiny by a number of regulatory authorities to ensure the transactions are done according to the rulebook.
In this regard, Pioneer has received the blessings of the stock exchange and CTC to complete the US$7,2 million acquisition of unlisted Unifreight Swift.
Sources last week said the deal remained to be finalised at shareholder-Government level in terms of ensuring compliance with indigenisation require-ments.

The Indigenisation and Economic Empowerment Act requires foreign-owned firms to cede for value at least 51 percent equity to indigenous people.
“We are done with the Competitions and Tariff Commission and the Zimbabwe Stock Exchange. We now have their approval,” said the sources.
But The Herald Business understands that loose ends remaining on indigenisation pertain only to Unifreight Swift, as Pioneer is locally-owned.

Unless all the regulatory approvals have been received the transport and logistics group cannot start integrating Unifreight Swift into its operations.
In terms of the deal, Pioneer will issue 514 974 875 ordinary shares of US0, 008c each to meet the purchase consideration for Unifreight of US$4 million.

The balance on the purchase consideration comprises US$900 000 Unifreight debt secured on trucks, US$1,5 million for the purchase of the Swift brand and US$711 000 for Unifreight Information Technology systems.
The Swift brand will be paid for over five years while Unifreight’s IT systems will be paid for over three years for what should enhance Pioneer’s profitability.

Since Pioneer would issue out 514 974 875 ordinary shares to meet the purchase consideration for Unifreight the firm will have to increase its authorised ordinary share capital from 600 million shares to 1,4 billion shares.

Pioneer’s asset base would increase by US$12 million to US$30 million after the acquisition of trucks, trailers, vehicles and equipment of Unifreight.
Pioneer moved to acquire Unifreight Swift after identifying an opportunity to claw back the market lost during the decade of economic instability.

During the economic upheaval, Pioneer’s consolidations unit, Clan Transport, faced serious operational challenges from which it failed to recover in the new environment.