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Business Reporter
ZIMBABWE Stock Exchange listed company, Willdale, says it has managed to raise $3,25 million through a rights issue to recapitalise the business.Last year the company indicated intentions to raise $8 million to enable it to return to profitability.
According to results of the company’s preference share rights offer issued yesterday, only 14,77 percent of the 3,255,000 preference shares on offer were snapped up.
The balance of the shares, 2,7 million, were taken up by the underwriter Old Mutual Life.
The shares were offered for cash at a subscription price of $1 each.
In April this year, ahead of the rights issue, Willdale indicated that the company was still recovering from the effects of the hyperinflationary environment.
The funds raised from the rights would be channelled towards capital expenditure, plant refurbishment, spares, consumables and working capital requirements.
“The result has been excessive down-time in Willdale limited’s production operations. The low production volumes have resulted in high average cost of production for the company leading to reduced viability of the company’s brick making operations,” the company said then.
“Directors are of the view that the new capital injection will provide the company with the ability to improve production volumes, restructure its balance sheet and enjoy economies of scale.”
As of September 30, 2013 Willdale had a debt of $6,65 million with over 86 percent of it short-term.
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