adminZimplow Holdings has disposed of its property along Robert Mugabe Road for $3,2 million in a transaction that, together with the $5 million to be raised from the rights issue, is expected to extinguish the group’s short term borrowings.
Shareholders approved the capital raise at an extraordinary general meeting held towards the end of last year.
Chief executive Zondi Kumwenda said the $8,2 million will see the group retire a significant portion of the short term expensive debt.
The 153 Robert Mugabe Road building was classified as an investment property on the balance sheet.
As at October 31 the group had short term debt of $8,42 million at a cost of 11 percent.
Total debt stood at $13,14 million inclusive of the $4,72 million in long term at 12 percent. The long term debt relates to the asset based facility from Brazil.
Mr Kumwenda said the funds would in turn reduce the impact of finance costs on the income statement as the costs were chewing up $1,3 million per year.
The $5 million rights offer opens today at a price of 6,42c per share. The extent of dilution on the Zimplow shares as a result of the offer is 33.3 percent.
Sino Properties (Proprietary) Limited, an investment vehicle domiciled in Mauritius and the new largest shareholders in the company, will be underwriting the transaction.
The vehicle represents a Singaporean company which has interests in mining. The Singaporean company has other interests in the country.
Online Reporter