OK Zimbabwe: The new shareholders, the creditors, and the plan to end the crisis
New investors bought shares in OK Zimbabwe just before the country’s biggest retailer shook up its management and laid out a strategy to reverse a crisis that has forced it to close some of its shops.
The company announced the return of former executives Willard Zireva and Siyavora to lead the company through a “comprehensive review and restructuring” while its searches for new leadership. They replaced CEO Max Karombo, CFO Phil Mushosho and Supply Chain Director Knox Mupaya.
Ahead of the changes, on February 5, some 23 million shares in OK were traded, which alarmed some stockholders who feared a takeover of the company at its most vulnerable point.
Stanbic Nominees sold 12,448,714 shares, with AMZIM Pension Fund-Old Mutual Investment Group selling 1,151,945. The buyers were Akribos Wealth Managers Nominees, who bought 12,285,281 shares, and Akribos Nominees, who took up 4,053,000. Datvest Nominees bought 3,199,625 OK shares. Akribos had 1.7% in 2023 and has been building its stake in OK Zimbabwe. It is now the tenth largest shareholder in OK with 2%. Mega Market, one of the biggest investors on the ZSE, added 844,300 shares to its OK portfolio, adding to the 55,470,376 it already had in the retailer.
Akribos Wealth Managers, which holds shares on behalf of private investors, is the second largest shareholder in CBZ. NSSA remains OK’s biggest local shareholder, followed by Old Mutual Life Assurance.
Why OK stock ran low
In its brief to shareholders, OK explains why stockouts worsened over the past year.
“The business procured stock in USD from April-June 2024 and signed contracts with suppliers to that effect. Before this period, the business was severely under-stocked as suppliers were not keen to supply in ZWL (RTGS),” OK says.
This was necessary to to get the best USD prices to compete with the informal sector, and to get longer trading terms with suppliers, who agreed to 90-day terms.
At the time, OK sales were 75% in USD. However, the launch of the ZiG saw USD collections falling to below 30%.
“Engagements with the suppliers to accept ZWG in exchange for their USD balances were not successful as most of them were prepared to wait out the 90 days hoping to receive USD,” OK says.
There was more trouble after the September devaluation.
“The devaluation of the ZWG on 27 September 2024 resulted in the business requiring more ZWG to settle suppliers at an exchange rate of 26 after having sold products at 13.”
What’s to be done?
As part of its recovery mission, OK has taken on a Credit Monitoring Arrangement (CMA) programme. A CMA allows a company’s bankers to assess if it can repay loans and recover. Accountants Grant Thornton, on behalf of banks, will lead engagement with OK suppliers.
Among OK’s biggest creditors are Innscor, owed US$1.1 million, Mega Market, owed US$966,201, National Foods (US$861,337), Seed Co (US$782,494), Delta (US$742,880) and Blue Ribbon (US$602,606). In total, OK owes a list of top creditors – 69% of total creditors – US$9,884,368 and ZiG 177,091,021, 48% of ZiG creditors.
As part of its restructure, OK is closing non-viable branches (Glen Norah, Kuwadzana Ext., R. Manyika, Chitungwiza Town Centre) and replacing them with new branches (Pomona, Makoni, and Liberation City). The company plans to restructure its business, cutting costs, decentralising working capital and raising new funding for operations and capex.-Newswire