OK Zimbabwe has revealed that discussions to raise US$30 million are now at an advanced stage, as the retailer moves to rescue its operations.
Last month, OK’s board resolved to undertake a capital raise of US$30 million to bridge a funding gap, pay creditors and stabilise the company’s financial position.
It said the capital raise would be a combination of a rights issue, private placement and debt instruments.
Company documents revealed in February that OK owed US$30,34 million to suppliers, which it was struggling to service.
“Further to the cautionary announcement dated 2 April 2025, directors of OK Zimbabwe Limited wish to advise shareholders and the investing public that discussions regarding the proposed capital raise in the sum of up to US$30 million are now at an advanced stage,” OK said in a statement.
“Further details will be announced in due course. The company will then publish a circular to shareholders incorporating notice of an extraordinary general meeting of members to consider and approve the capital raise.”
It said further announcements would be made by regulatory requirements as and when there are material developments.
OK had trade and other payables of US$30,34 million as of the end of January.
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From this amount, creditor balances were US$26,48 million and other payables were US$3,86 million.
The firm had 25 top creditors in its US dollar credit that it owed US$9,88 million. It also owed ZiG177,09 million to 25 top creditors.
In February, OK’s management set up a consignment stock management agreement with Grant Thornton.
This agreement is a contract where a seller (consignor) provides goods to a buyer (consignee) to be sold on the consignor’s behalf, with the consignee only paying for the goods after they are sold.
The total cost of the CMA under Grant Thornton is 1,5% of the supplier payments with an upper limit of US$200 000 per month.
“This cost will be shared on a 50/50 basis and therefore the actual cost to OK will be 0,75% of the supplier payments (maximum US$100 000 per month). OK has also set up a direct consignment stock agreement through the bank at no extra cost,” OK said in a shareholder presentation in February.
“Suppliers have a choice to go with Grant Thornton or directly with OK and the bank. Most big suppliers are choosing to deal directly with OK.”
