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ZIMPLOW shareholders yesterday approved a capital raising initiative to raise $5 million through a rights offer of about 78 million shares to existing shareholders to retire expensive debt mainly incurred from the takeover of Tractive Power Holdings.The group’s extraordinary general meeting approved the $5 million renounceable rights offer on the basis of one new share for every two shares held. This translates to 77,840,000 new ordinary shares of a nominal value of 0.04 cents at a rights offer subscription price of 6.42 cents per share.
“The funds will be used to repay the legacy debt from the takeover TPH,” said Zimplow chief executive Zondi Kumwenda.
The group had borrowed $3,4 million in short-term debt to complete its acquisition of Tractive Power Holdings last year.
As at June 30, 2014, the group had short-terms borrowings of $10,7 million and long term borrowings of $1,4 million incurred in normal course of business.
“The main aspect of the EGM was about the rights offer for $5 million for the Zimplow group. To put that into effect there are other several resolutions that had to be undertaken,” said Kumwenda.
To facilitate the issuance of the new shares the group increased the authorised share capital of the company in order to raise enough shares to issue to the shareholders who would have subscribed to the rights offer.
The authorised share capital was increased to 300 million from 200 million.
“The second resolution related to the amendment of the company’s Articles of Association to formalise the increase in the issued share capital,” said Kumwenda.
Sino Properties (Proprietary) Limited, an investment vehicle domiciled in Mauritius is underwriting the rights offer.
The EGM authorised the issue of 1,947,040 new ordinary shares at the price of 6,42 cents per share.
Bongani Ndlovu
Online Reporter