Online Reporter
Martin Kadzere
OK Zimbabwe’s interim chief executive, Mr Willard Zireva, will become chairman of the supermarket chain to ensure stability of the retail giant when the incumbent Mr Herbert Nkala steps down next month.
Mr Nkala, the long-serving chairman, along with board members Ms Rose Mavima, Mr Tawanda Gumbo and Mr Wonder Nyabereka, are expected to formally step down at the forthcoming annual general meeting, sources familiar with the developments told this publication.
The move follows an “urgent restructuring effort” by the OK shareholder, which saw the termination of contracts for former chief executive Mr Maxen Karombo, chief financial officer Mr Phillimon Mushosho and supply chain director Mr Knox Mupaya through voluntary separation agreements.
To provide experienced leadership and stability and to instil confidence among suppliers, the board temporarily reappointed Mr Zireva, who had previously served as chief executive for over two decades.
Mr Alex Siyavora returned as chief financial officer and Mr Muzvidzwa Chingaira was appointed supply chain director.
“It is an interim arrangement in which he (Zireva) is expected to be the executive chairman for the next three years to achieve stability,” said one source.
“The current executive management, comprising seasoned former executives who were brought in to stabilise the company, will remain in place until the end of the current financial year.
A new substantive executive management team will be appointed to succeed them, with a mandate to implement the strategy with operational rigour and strategic foresight,” said OK.
In a circular outlining its capital-raising initiative, OK said the reconstituted board will provide renewed oversight and enhanced governance capabilities.
In the circular, the company unveiled a comprehensive capital-raising initiative aiming to secure US$30,5 million through a combination of a renounceable rights offer and the disposal of selected properties.
The primary objectives of the fundraising are to partially settle legacy creditors, bolster the company’s working capital, meet capital expenditure requirements, and cultivate fresh supplier support.
A substantial portion of the capital, US$20 million, is expected to be raised through a renounceable rights offer.
The board is seeking shareholder approval to issue 1 834 982 573 new ordinary shares. Shareholders of OK will be entitled to subscribe for 1,37 new ordinary shares for every 1 share held on the record date of July 21, 2025.
The subscription price for these new shares is set at US$0,0109 per share, payable in full upon acceptance. This price represents a 15 percent discount to the 30-day volume-weighted average traded price as of May 23, 2025.
It is explicitly stated that all payments related to the rights offer must be made in United States dollars.
Upon fulfilment of all conditions precedent, including shareholder approval, the new ordinary shares will be issued as fully paid and will rank equally with all existing OK shares from their issue date.
Trading of the rights offer shares will commence immediately upon allotment.
Shareholders holding at least 73 percent of the issued share capital have formally committed to supporting the proposed capital raising transactions and following their rights in the rights offer through irrevocable commitments. This leaves an uncommitted balance of US$5,4 million.
To ensure the full subscription of shares offered in the rights offer, OK has secured underwriting arrangements with three key shareholders, the National Social Security Authority, Datvest Nominees and Old Mutual.
The shareholders, who collectively own 37 percent, have provided bank guarantee letters confirming the availability of US16,54million for their respective rights issue and underwriting commitments.
An additional USS7,2 million is anticipated from other shareholders, representing 36 percent of the company, who have provided irrevocable commitments to follow their rights.
Therefore, a total of US23,74 million is committed through both underwriting and irrevocable commitments from shareholders controlling 73 percent of the company.
Due to the structure of the underwriting arrangement, neither the lead underwriter nor any of the sub-underwriters is expected to exceed a 35 percent shareholding in the company after the rights offer, thus avoiding a mandatory offer trigger under the listing regulations, the circular said.
The renounceable rights offer is scheduled to open on July 21, 2025, and close on August 4, 2025.
In addition to the rights offer, OK Zimbabwe plans to raise US$10,5 million in net proceeds through the disposal of selected immovable assets.
For properties currently occupied by the company, the sale will be contingent on buyers agreeing to long-term lease-back arrangements with OK.
The company will prioritise properties offering the greatest saleability and value realisation given current market conditions. A list of properties has been identified from which these assets will be sold.
OK’s current operational challenges stem from a combination of internal and external factors.
Internally, issues include poor capital allocation, inefficient cash flow management and delayed engagement with creditors, alongside slow adaptation to market trends and suboptimal execution of expansion initiatives, the company said.
Externally, the company has been impacted by an uneven playing field dominated by supply chains outside of regulatory frameworks.
As of February 28, 2025, OK Zimbabwe’s total overdue creditors amounted to over US$30 million, with US$24 million owed to suppliers, US$5,12 million for other payables (including utilities, services, marketing, cleaning and security), and US$880 000 in statutory obligations.
