PG Industries Zimbabwe Limited says it is in a discussion with a potential investor who has expressed interest in acquiring the entire share capital of the troubled firm.
The diversified company admitted yesterday that its operations were still in the red and hoped the proposed investment will breathe a new lease of life in it.
“Following subsequent discussions and negotiations, directors have now received a written offer from the prospective investor to acquire the entire share capital of PGIZ, invest an additional amount to make a once off final settlement to all creditors and provide working capital and funds required for replacement and refurbishment of production equipment,” said PGIZ in a statement.
The offer is subject to relevant regulatory approvals.
In a cautionary note the directors said they have evaluated the impact of the proposed offer on existing shareholders and creditors “and will be recommending the offer to shareholders and creditors for approval”.
The update is part of the reconstruction scheme of the firm that was sanctioned by the High Court and registered by the Registrar of Companies last year to protect the company’s assets.
Overall the performance of PGIZ continues to be adversely affected by poor stocking levels with the exception of Zimtile whose production and sales volumes are on the increase due to improved capacity utilisation.
Without giving statistics, the company reported that while its merchandise sales dropped, losses for financial periods ending December 31, 2014 and 2015, narrowed due to significant savings in operational expenses and finance charges.
“The balance sheet position continues to be negative, with liabilities exceeding assets,” it said.
As a result the company has failed to make quarterly payments to concurrent creditors that were due on October, 16, 2015 and on January 16, this year.
The company has also said it was unlikely to be in a position to pay the April, 16, 2016 commitment.
PG Industries (Zimbabwe) Ltd is a group of companies. It has its origins in the city of Bulawayo since 1948. It began as a merchandiser of glass and timber. Over the years it has diversified into a wide range of products and services including timber boards, cement, cement products, hardware, plumbing, glass, windscreens, wood and glass-based value-added products.