Business / Companies
GB Holdings secures $1 million funding
26 Jun 2013 at 11:56hrs | Views
GB Holdings managed to secure $1 million funding for raw materials from CABS and the firm is still engaging other possible funders "to get the company to go", managing director Wilbroad Tsuroh told the AGM today.
The Group expects an increase in capacity utilisation, sales volume and an overall cost reduction after the group accessed $1 million funding from the Distresses and Marginalised Areas Fund (DIMAF).
"At the last AGM the board agreed that the business required some funding and the way to do it was to leverage on our properties. We were not comfortable in outright sale of properties and we decided that what we were going to do is to try and do a sale, lease and buyback of those properties," he said.
Tsuroh told the AGM that the Dimaf facility has been the first major step in addressing the working capital challenges of the company. He said the group had turned to Dimaf after failing to get attractive offers for the Cernol Chemicals industrial buildings under a sale-lease to buy arrangement.
He noted that at that time it looked feasible and there were a lot of players who seemed interested but the environment in the country changed quite rapidly and that option became awkward.
Therefore, they approached CABS and applied for a $2 million funding but managed to secure $1 million.
"We needed money for raw materials but we also needed money to enhance our in-process efficiencies and make sure that we upgrade some of our plant and equipment but unfortunately CABS could only give us $1 million which we pumped into raw materials.
He said the firm used most of it to buy back "effectively" their market share because during the period when they were desperately underfunded some of their customers were taken by other players.
"The advantage has been our ability to build confidence with our market. As we've reported before we were challenged in terms of convincing our natural market in Zimbabwe that we're able to meet their orders given our financial situation.
"But now... we're also beginning to see our market responding to our healthier position.
Tsuroh said this does not mean that they are out of the woods as they are still challenged.
"We anticipated that the business would have needed $2 million to take care of immediate working capital apart from the need to improve process efficiency," he added.
He noted that they only secured $1 million and the board is still pursuing other channels of raising more funding to make sure that they can convert those raw materials in an efficient and appropriate manner.
The Group expects an increase in capacity utilisation, sales volume and an overall cost reduction after the group accessed $1 million funding from the Distresses and Marginalised Areas Fund (DIMAF).
"At the last AGM the board agreed that the business required some funding and the way to do it was to leverage on our properties. We were not comfortable in outright sale of properties and we decided that what we were going to do is to try and do a sale, lease and buyback of those properties," he said.
He noted that at that time it looked feasible and there were a lot of players who seemed interested but the environment in the country changed quite rapidly and that option became awkward.
Therefore, they approached CABS and applied for a $2 million funding but managed to secure $1 million.
"We needed money for raw materials but we also needed money to enhance our in-process efficiencies and make sure that we upgrade some of our plant and equipment but unfortunately CABS could only give us $1 million which we pumped into raw materials.
He said the firm used most of it to buy back "effectively" their market share because during the period when they were desperately underfunded some of their customers were taken by other players.
"The advantage has been our ability to build confidence with our market. As we've reported before we were challenged in terms of convincing our natural market in Zimbabwe that we're able to meet their orders given our financial situation.
"But now... we're also beginning to see our market responding to our healthier position.
Tsuroh said this does not mean that they are out of the woods as they are still challenged.
"We anticipated that the business would have needed $2 million to take care of immediate working capital apart from the need to improve process efficiency," he added.
He noted that they only secured $1 million and the board is still pursuing other channels of raising more funding to make sure that they can convert those raw materials in an efficient and appropriate manner.
Source - Byo24news
