Concern over RioZim recapitalisation plan
16/03/2012 00:00:00
by bloomberg.com
THE Securities Commission of Zimbabwe said it is concerned that a proposed $55 million recapitalization plan by RioZim doesn’t provide sufficient information for shareholders to make their own assessment.
“There is need for disclosure on RioZim’s entire debt maturity profile so that investors and shareholders can make their own assessment on which debt might need early retirement,” Tafadzwa Chinhamo, the regulator’s chief executive officer, said in a statement published in the Newsday newspaper.
Without that transparency, it’s possible that all the money will be “channelled straight towards debt retirement, thus leaving the company with no working capital, a position which led to the current situation.”
“It’s not a big issue,” Josh Sachikonye, RioZim’s managing director, said in a phone interview from Harare. “We’ve met with the commission and we’re resolving that.”
A plan by the Harare-based gold and diamond miner to raise $40 million through a rights offer failed last year.
RioZim blamed Zimbabwe’s black empowerment laws, which require companies to be majority-owned by black Zimbabweans, for scaring investors. Subsequent newspaper reports said the miner had debts of between $40 million and $59 million. RioZim is due to hold an extraordinary general meeting next week.
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