In a shocking turn of events, OK Zimbabwe country’s largest retail chain, is on the brink of collapse due to severe financial constraints. The company has shut down several outlets and is desperately trying to raise US$30 million in fresh capital to stay afloat.
A crippling liquidity crunch, mounting supplier debts, and the underperforming Zimbabwe Gold (ZiG) currency have all contributed to OK Zimbabwe’s financial woes. Suppliers are demanding hard currency, refusing to accept ZiG, and some have even intercepted partial payments meant to unlock new stock.
The OK Zimbabwe board has approved a recapitalization plan, including a rights issue, private placement, and new debt instruments, to stabilize the business, settle debts, and restore supplier confidence. CEO Willard Zireva is leading the turnaround effort, with fundraising efforts expected to be finalised by June 2025.
OK Zimbabwe’s financial struggles reflect the challenges facing Zimbabwe’s private sector, including access to capital, exchange rate instability, and policy uncertainty. The retail sector is under intense pressure due to currency volatility, high inflation, power shortages, and declining consumer spending power.
OK Zimbabwe is saddled with US$17 million and ZWG537 million in outstanding supplier payments, prompting suppliers to cut ties or demand prepayments in US dollars. The company’s financial woes have led to store closures and retrenchments, but a more cautious approach to store rationalization has seen the reversal of closures in some branches.
OK Zimbabwe has issued a cautionary announcement to investors, advising them to exercise caution when dealing in the company’s shares. The company’s struggle to navigate the current economic storm underscores the challenges facing Zimbabwe’s private sector. Will OK Zimbabwe’s recapitalization plan be enough to save the retail giant?
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