By Business Reporter
Retail giant, OK Zimbabwe which has been struggling over the last 12 months with empty shelves and branch closures has issued a cautionary statement advising stakeholders of its intention to raise USD 30million to support its turn around strategy.
The erratic financial position the company faces which it attributes to a difficult operating environment has been characterized by macroeconomic volatility, including pricing issues related to the exchange rate, while informal players operated without this constraint, giving them a competitive advantage has necessitated the cautionary statement and the need for urgent capital injection for revitalisation.
“In light of the foregoing, the Board of Directors has resolved to undertake a capital raise in the sum of up to US$30 million to bridge the funding gap and stabilise the Company’s financial position. The capital raise will be a combination of a rights issue, private placement and debt instruments,” read the statement from OK.
Expectations are high from the board that the capital-raising initiative will strengthen the Company’s balance sheet and liquidity position;enhance working capital availability to ensure smooth business operations; and support the Company’s strategic turnaround plan.
Additionally, the OK Zimbabwe Board advises shareholders and the investing public to exercise caution when dealing in the Company’s shares.
OK Zimbabwe has become a pale shadow of its former self struggling to maintain adequate stock levels as many suppliers could no longer continue providing goods and services due to outstanding unpaid balances.
This has directly impacted product availability across the Company’s stores, affecting revenue generation and overall business performance. Competition from informal traders who do not incur many overhead costs and run on a cash basis, has not helped the company’s cause
