HARARE – OK Zimbabwe Limited has entered corporate rescue after its US$30.5 million recapitalisation plan failed to close a critical funding gap, leaving the country’s largest listed supermarket group struggling under mounting supplier debt, declining revenues and worsening liquidity constraints.
The move follows stalled property disposals meant to raise US$10.5 million and growing pressure from creditors owed about US$24 million, despite shareholders having injected US$20 million through a rights offer.
A notice issued on 25 February 2026 by Wintertons Legal Practitioners confirmed that the board resolved on 23 February 2026 to voluntarily commence corporate rescue proceedings in terms of Section 122 of the Insolvency Act.
The notice was filed with the Master of the High Court and the Registrar of Companies.
Bulisa Phillimon Mbanje has been appointed Corporate Rescue Practitioner, with proceedings deemed effective from 24 February 2026.
The move follows months of financial strain linked to a recapitalisation plan aimed at raising US$30.5 million to restock shelves and settle debts.
Shareholders successfully injected US$20 million through a rights offer. However, the remaining US$10.5 million, expected from property disposals, has not been realised after sales took longer than anticipated.
Company secretary Margaret Munyuru previously said sale and purchase agreements on two properties were close to signature, with offers on three others under review.
By August 2025, only US$7.3 million in offers was under consideration, some structured as long-term leaseback arrangements.
The properties earmarked for disposal included OK Mbuya Nehanda, OK Glen View, Birmingham Warehouse, OK Gweru, OK Malvern, two Harare stands in Odar and Salisbury townships, and a Borrowdale stand valued at US$6 million.
At the same time, the retailer accumulated US$24 million in supplier arrears. While partial settlement agreements were reached, the company acknowledged that prevailing trading terms, particularly demands for upfront US dollar payments, limited its ability to rebuild stock levels.
“We appeal to all our suppliers to work with us during the summer trading season, our success is your success,” the company said in an earlier appeal.
However, no comprehensive agreement was reached.
The retailer recorded a US$17.8 million loss for the six months to September 2025. Revenue declined 53% to US$240 million in 2025, reflecting falling volumes and constrained stock availability.
Operational challenges cited by the company include exchange rate volatility, liquidity shortages, supply chain disruptions, persistent power outages and increased competition from informal traders who operate largely on cash terms.
Although overheads were reduced by 51%, the savings were insufficient to offset declining sales.
Of its 62 stores, 11 have been closed, with three more pending. Head office staff cuts and other cost-containment measures are expected to reduce expenses by a further 15%.
The group also exited the Food Lovers Market franchise, writing off US$4 million in goodwill linked to its Fresh & Green City operation.
Major shareholders include the National Social Security Authority (NSSA) and investors represented by Datvest Nominees.
The corporate rescue follows a leadership overhaul announced in February last year after mounting operational challenges and public criticism from the Ministry of Finance.
Former Chief Executive Officer Maxen Karombo, Chief Financial Officer Phillimon Mushosho and Supply Chain Director Knox Mupaya exited under voluntary separation agreements.
Former CEO Willard Vimbai Zireva returned as caretaker chief executive, Alex Edgar Siyavora resumed as CFO, and Richard Chingaira assumed the supply chain portfolio.
The executive changes came after a 36% decline in sales volumes in the quarter ended December 31, 2024, and the closure of four Harare branches due to stock shortages and economic pressures.
Finance Ministry Permanent Secretary George Guvamatanga had publicly criticised management, arguing that formal retailers should innovate to compete with informal traders rather than attribute losses solely to currency instability.
Documents accompanying the corporate rescue notice state that the board resolution was founded on sworn statements outlining the company’s financial distress.
The primary factors cited over the past year include failure to complete property disposals needed to close the US$10.5 million funding gap, accumulated supplier debt of US$24 million and sustained revenue decline and reduced sales volumes.
Other issues include exchange rate volatility and foreign currency shortages, increased competition from informal traders operating on cash-based models and operational cost pressures, including power outages
Corporate rescue proceedings temporarily shield the company from creditor enforcement while a recovery plan is developed and presented to creditors and shareholders for approval.
The outcome will determine whether Zimbabwe’s largest listed supermarket group can restructure successfully or faces further downsising under the supervision of the appointed practitioner.
Discover more from Nehanda Radio
Subscribe to get the latest posts sent to your email.
