admin“RioZim shareholders approved the company’s recapitalisation. Shareholders voted 91.9 percent in support of the $5 million renounceable rights offer while the private placement and the issuance of convertible debentures were also approved by 92.93 percent and 92.64 percent of the shareholders respectively,” said Kingdom Financial Holdings Limited in its weekly market commentary.
This paves way for the injection of $56.6 million capital into RioZim by way of rights offers to shareholders to the value of $5 million and private placements to GEM Raintree Investments for the value of $5,6 million.
The capital would also be sourced by way of issuing convertible debentures to GEM Raintree Investments for $45 million.
RioZim director Mr Richard Tait told shareholders that the company persuaded the majority of the creditors to restructure the debt, while negotiations were in progress with some creditors.
Some of the company’s creditors had applied for judicial management of the company.
The company owes a number of local banking institutions about $60 million.
Towards the end of 2011, the company held an EGM to consider the $59 million cash call. However, shareholders rejected it.
Meanwhile, the Zimbabwe Stock Exchange (ZSE) downtrend entered its fifth week on Friday with RioZim trading at $0.45.
At the close of the week, the industrial index year-to-year date performance stood at a negative of 4.97 percent at 139.26 points while the resource index suffered a loss of 15.14 percent to 85.45 points during the same period.
Aggregate market capitalisation for the ZSE since the start of the year declined by 5.22 percent to $3.5 billion indicating the bearish sentiment that has gripped the local bourse.
An economic commentator, Mr Peter Mhaka said: “Trading on the local bourse is subdued due to liquidity challenges in the economy.
“Although the industrial index is weak, for the equities market investors, the current subdued prices provide a robust buying opportunity for long term investors,” he said.
Online Reporter