PG Industries Limited has reduced borrowings and restructured its operations as part of its strategy to turn around the business, a company official has said. In an update, PG Industries company secretary Kudakwashe Waniwa said a property disposal realised cumulative proceeds of $1 070 000.
TARISAI MANDIZHA BUSINESS REPORTER
He said proceeds from the disposal were used to settle $336 169 bank loans, with the balance used to purchase stocks and raw materials and a property swap completed resulting in the full settlement of a $3 138 525 secured bank loan.
“Short-term bank loans have been reduced from $ 4 432 845 at the beginning of January 2014 to $958 151 at 30 November 2014. This balance is being restructured to a three-year facility,” Waniwa said.
“On long-term borrowings, the company is in the process of implementing the conversion of debentures and accrued interest to ordinary share capital pursuant to the unanimous approvals by Debenture Holders and Shareholders at the Scheme Meeting of 24 January 2014 and EGM of 14 March 2014, respectively. $7 498 750 will be converted to ordinary share capital.”
She said a $1,1 million three year loan facility with a fixed annual interest rate of 12% per annum was raised at the end of June 2014. Waniwa said funds received were used to acquire stocks and raw materials.
She said receipts of $1 million from a private placement equity agreement was pending the sanctioning of the scheme.
Waniwa said the Scheme of Arrangement has not yet been registered following intervention by one of the creditors.
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She said legal advisors to the transaction were optimistic the matter would be set down and resolved favourably during the first quarter of 2015.
On the restructuring of operations, Waniwa said PG Building Suppliers and PG Timber have successfully been merged into one operating division of PG Merchandising Limited.
“The branch network was reduced from 18 to 15 while PG Glass will be divisionalised from January 1 2015 and Zimtile will only be divisionalised after settling amounts due to former minority shareholders,” she said.
Waniwa added that various stock supply arrangements were successfully concluded resulting in improvement in stock supplies, especially in the last quarter of 2014. The board continues to explore opportunities to ensure that the company is properly resourced, she said.
