OK Zimbabwe targets US$30 million capital raise to revive operations

OK Zimbabwe Limited, the country's largest retail chain, says it is in advanced discussions to raise US$30 million in fresh capital as part of a strategic plan to revive its operations, clear debts, and restore market confidence.

The capital mobilisation, which the company aims to complete by June 2025, is set to be a turning point for the embattled retailer, which has been battling financial headwinds marked by mounting debts and an inability to restock due to strained supplier relationships.

Speaking in an interview, OK Zimbabwe Chief Executive Officer Mr Willard Zireva confirmed that positive strides had been made, with most major shareholders expressing willingness to follow their rights in the recapitalisation exercise.

"Currently, we are finalising discussions with potential underwriters, and we are targeting to have the whole process completed and cash received before the end of June 2025," said Mr Zireva.

The planned capital raise, which will comprise a mix of a rights issue, private placement, and debt instruments, aims to stabilise the company's balance sheet and bolster liquidity. This will in turn enhance the group's working capital position and enable smoother business operations going forward.

Last month, the board of OK Zimbabwe approved the recapitalisation initiative to bridge a critical funding gap, repay creditors, and support the firm's turnaround strategy. The move comes after months of operational difficulties, including the company's failure to meet supplier obligations - a situation that prompted several key suppliers to halt deliveries.

The retailer is currently burdened with outstanding liabilities amounting to approximately US$17 million and ZWG537 million, forcing it to halt operations at six branches by the end of March 2025 and retrench affected workers. However, as part of its operational reboot, the group has since reversed plans to shut down its OK Mbare and Entumbane stores.

In a strategic move to spearhead the turnaround, the board rehired Mr Zireva, a seasoned retail executive who had previously led the company before stepping down eight years ago. His return has seen a shift in management direction, including reconsideration of some branch closures that had been planned under previous leadership.

"The capital raise is critical to reposition the business, and we believe the renewed support from our shareholders and partners signals confidence in our revival strategy," said Mr Zireva.

OK Zimbabwe has assured stakeholders that further details regarding the capital raise will be disclosed in an upcoming circular to shareholders, which will include a notice of an Extraordinary General Meeting (EGM) to formally approve the transaction.

In a recent cautionary statement, the company urged shareholders and the investing public to remain vigilant.

"Accordingly, shareholders and the investing public are advised to continue exercising caution when dealing in the company's shares. Further announcements will be made under regulatory requirements as and when there are material developments," read the statement.

The capital injection is expected to not only stabilise the business but also restore key supplier relationships, reposition OK Zimbabwe within the competitive retail space, and rebuild investor confidence after a turbulent financial period.