WILLDALE Limited has raised $3,3 million through a rights issue in a development which will put in motion plans to recapitalise the company, an official has said.
Tarisai Mandizha
Speaking at the company’s annual general meeting in Harare yesterday, chief executive officer Clifford Mushambadzi said whereas $5 million was required for the recapitalisation, only $3,225 million had been raised.
“The capital raising has brought a new lease of life into the company and it’s going to transform the company after so many months scouting for investors,” he said.
“The $3,255 million will provide a turning point for the company’s funding requirements. This should push production to the higher volumes required by the market.”
Mushambadzi said the company was currently operating at an average capacity utilisation of 30%. He said with the funding now in place, that should increase to at least 60%.
“The full impact of work done to date on both funding and procurement of mobile equipment, rehabilitation of idle assets, plus changes to the way things are done, will be best felt in the year ending September 2015,” said Mushambadzi.
He said currently demand was exceeding supply.
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“As the demand for quality bricks currently exceeds supply, Willdale is poised to regain its market leadership position, through increased production, supported by a sustainable profitable business model,” said the Willdale boss.
He said the company continued to receive enquiries from individuals, corporate and government institutions for the supply of bricks.
“Our success in converting these enquiries to confirmed orders will be determined by our ability to supply a quality product within the shortest possible time,” Mushambadzi said.
He said although there was still pressure on margins due to competition, the company expected to manage competition through high volume and low cost production which would give it flexibility in pricing. Mushambadzi said the first half of the current financial year, which includes four months of wet weather, had witnessed the same production levels as experienced last year.
He said this was in line with a deliberate strategic decision to reduce green production in the wet season to minimise brick losses.
Mushambadzi said the uptime was 56% during the year to September 30 2013 and the target was to push that to 80% in the second half due to the recapitalisation currently underway.
He added the company was working towards acquiring new forklifts and a fleet of tippers to reduce over-reliance on hired equipment in mining operations.
