Monday, March 26, 2012

(HERALD) RioZim MD steps down

RioZim MD steps down
Monday, 26 March 2012 00:00
Martin Kadzere Senior Business Reporter

RIOZIM managing director Mr Josh Sachikonye is set to step down, as shareholders approved the US$55 million capital raising initiatives. RioZim chairman Mr Tichaendepi Masaya said Mr Sachikonye, who has been at the helm of the diversified resource firm since 2004, would step down with effect from March 31 this year.
The new managing director will be announced at the company’s annual general meeting in May. No reasons were given for Mr Sachikonye’s resignation.

But the market had previously speculated about Mr Sachikonye’s imminent departure.
With approvals from the shareholders, RioZim will raise US$5 million through issuance of 10 million rights issue shares at US50c.

Another US$5 million would be raised through private placement of about 13 million shares to Global Emerging Markets. An additional US$45 million would be raised via convertible debt to GEM Raintree, a Mauritius-based firm, who will also underwrite the rights issue.

The convertible debentures would be drawn over the next five years to finance existing operations, settle debts and for recapitalisation.

Shareholders voted 91,9 percent in favour of the rights issue while 92,93 percent and 92,64 percent of the shareholders approved the private placement and the issuance of convertible debentures respectively.

About 74 percent of the shareholders were present.

RioZim director Mr Richard Tait told shareholders that the company managed to persuade the majority of the creditors to restructure the debt, while negotiations were in progress with some creditors.

Some RioZim creditors had applied for the provisional judicial management of the company. RioZim owes several local banks close to US$60 million.

The EGM was thrown into doubt last week after the Securities Commission of Zimbabwe expressed dissatisfaction with some sections of the circular detailing the RioZim recapitalisation.

Last year, RioZim held an EGM to consider the US$59 million cash call but it was rejected by shareholders as about 47 percent of the shareholders said “No” to the rights offer while 32 percent voted in favour.

RioZim requires fresh capital to retire debt and recapitalise operations. The company traded at US45c on the ZSE last Friday.


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