HARARE – OK Zimbabwe Limited, one of the country’s leading retail chains, has secured crucial shareholder approvals for a significant capital raise and strategic asset disposal, signaling aggressive measures to navigate ongoing financial difficulties.
The resolutions were unanimously passed at an Extraordinary General Meeting (EGM) held on July 17, 2025.
The approvals come as OK Zimbabwe has openly acknowledged experiencing “significant operational and financial difficulties” due to a challenging operating environment, including macroeconomic volatility, inflationary pressures, and liquidity constraints.
These factors have impacted the company’s ability to meet financial obligations, particularly to suppliers, leading to stock shortages and anticipated substantial losses for the financial year ended March 31, 2025.
Accordingly, shareholders approved a special resolution to increase the company’s authorised share capital from two billion ordinary shares to six billion ordinary shares. This expansion is a prerequisite for the planned capital injection.
An ordinary resolution was passed to raise approximately US$20 million through a renounceable rights offer. This will involve the issuance of 1,834,982,573 new ordinary shares at a subscription price of US$0.0109 per share.
Existing shareholders as of the record date of July 21, 2025, will be offered 1.37 Rights Offer shares for every one OKZL ordinary share held. The payment for these shares will be exclusively in United States Dollars.
Following the rights offer, any remaining unissued ordinary shares will be placed under the control of the Directors, granting them general authority to allot and issue these shares under terms they deem fit until the next Annual General Meeting.
According to the company secretary Margaret Munyuru, the EGM also approved the appointment of the National Social Security Authority as Lead Underwriter, with Datvest Nominees (Private) Limited and Old Mutual Life Assurance Company Limited as Sub-Underwriters for the rights offer, providing crucial backing for the capital raise.
In a move to further strengthen the company’s financial position, shareholders approved the disposal of select immovable properties, aiming to raise approximately US$10,500,000.00 in net proceeds.
The properties include vacant commercial stands, a warehouse, and several retail store locations. The Board of Directors has been empowered to negotiate and finalise these sales, even with related parties, provided they are at arm’s length and for best value.
The properties lined up for sale include the OK Mbuya Nehanda store, OK Gweru, OK Glen View, and OK Malvern. The company also plans to sell a warehouse and two vacant commercial stands.
Shareholders also accorded approval for the reconstitution of the Board of Directors at the forthcoming Annual General Meeting.
This measure is intended to refresh and realign the Board with the company’s future strategic direction and onboard new skills for its “next phase of transformation.”
The Directors were further granted full authority to undertake all necessary actions to implement and complete the capital raise and other approved transactions, ensuring compliance with all regulatory conditions.
The retail giant is experiencing severe financial distress, unable to generate enough cash from its operations to cover its debts as they become due.
This liquidity crisis has resulted in a significant buildup of overdue payments to creditors, hampered its ability to operate effectively, and increased the risk of legal action from unpaid creditors.
