HomeNewsOld Mutual to up stake in Rio Zim

Old Mutual to up stake in Rio Zim

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Old Mutual Life Assurance is set to up its stake in Rio Zim following its agreement with GEM Management to sub-underwrite the mining concerns rights issue.

Some 10 million rights offer shares were recently offered to shareholders, but just above six million were taken up.

Before the underwriting the rights offer Old Mutual held a 19,5% stake.

Shareholders are advised that subsequent to the opening of the rights offer, and under the provisions of clause 3,7 of the underwriting agreement, GEM Management Limited entered into a sub-underwriting agreement with Old Mutual Life Assurance Company Zimbabwe Limited, Rio Zim said in a statement announcing results.

The remaining rights offer shares not subscribed for have been taken up by the sub-underwriter, Old Mutual Life Assurance Company Zimbabwe Limited.

The subscription price was $0,50 per ordinary share on the basis of 33,35 ordinary shares for every 100 shares already held.

The shares from the rights issue were traded on the Zimbabwe Stock Exchange yesterday.
An extra-ordinary general meeting last month approved several capital raising initiatives.

Shareholders also approved the capital raising initiative of $10 million through private placement, $5 million through a rights issue and $45 million through convertible debentures to GEM Raintree.

The company has been trying to raise capital for the group since 2009, but failed to obtain a suitable underwriter.

Rio Zim has appointed Ashton Ndlovu as chief executive officer to replace long-serving managing director Josphat Sachikonye, who stepped down last year.

Ndlovu joins RioZim at a time the mining company owes local banks over $50 million and seeking ways to recapitalise the business.

Financial institutions owed by the firm include the Infrastructure Development Bank of Zimbabwe, Tetrad, ZB Bank, Metropolitan Bank and others.

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