OK Zimbabwe’s US$30 million lifeline nears as retail crisis deepens in the country

HARARE – OK Zimbabwe Limited, one of the country’s prominent retailers, is in advanced discussions to raise up to US$30 million, a move that reflects the significant financial distress gripping the company and also highlights the broader struggles of Zimbabwe’s formal economy.

This capital raise, intended to bridge a funding gap, settle supplier debts, and stabilise its financial position, comes amidst a challenging operating environment characterised by volatile exchange rates, inflationary pressures, and a competitive landscape increasingly dominated by the informal sector.

The company’s cautionary announcement, initially issued on May 2, 2025, and further updated on June 4, 2025, reveals that the proposed capital raise will be a combination of a rights issue, private placement, and debt instruments.

“Further to the cautionary announcement dated 2 May 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 and are nearing finalisation,” Margaret Munyuru, the company secretary stated.

“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 for the purpose of considering and approving the capital raise.

“Accordingly, shareholders and the investing public are advised to continue exercising caution when dealing in the Company’s shares. Further announcements will be made in accordance with regulatory requirements as and when there are material developments.”

Company documents from February indicated that OK Zimbabwe owed approximately US$30.34 million to suppliers, with a significant portion being creditor balances.

OK Zimbabwe’s difficulties are not isolated. The wider formal retail sector in Zimbabwe is facing a severe downturn, as evidenced by the imminent closure of two Food Lovers Market branches in Avondale and Borrowdale.

These closures, despite OK Zimbabwe having acquired their franchises in 2023, signal the profound impact of the country’s economic instability on businesses.

The challenging operating environment has created an uneven playing field, where informal players often benefit from less stringent regulatory oversight and more favorable parallel market exchange rates.

This has significantly impacted major retailers like N Richards Group, Spar, and Pick n Pay, leading to numerous store closures nationwide and a decline in consumer spending power.

The Zimbabwean government, in April 2025, repealed Statutory Instrument 81A of 2024 by enacting Statutory Instrument 34 of 2025.

This change granted businesses the freedom to set their own exchange rates, a departure from the previous mandate that forced formal retailers to use the official interbank rate, which had disadvantaged them against informal traders.

Despite this policy adjustment, the general operating environment remains difficult.