Published: 27 June 2025

OK Zimbabwe Limited has announced plans to sell selected properties as part of a broader strategy to raise US$30 million needed to stabilise its operations and clear outstanding debts.

Last month, the retailer revealed it was exploring ways to raise US$30 million in capital to address mounting supplier debts and other financial obligations. Yesterday, the company circulated details to shareholders outlining its dual approach: raising US$20 million through a renounceable rights offer and generating the remaining US$10.5 million by disposing of certain immovable assets.

"The company has identified certain immovable assets, from which selected properties will be disposed of to raise US$10,500,000 in net proceeds, after accounting for disposal-related costs," OK stated in the circular.

For properties currently occupied by OK Zimbabwe, sales will be conditional on agreements for long-term leasebacks, allowing the company to continue operations at these sites without owning the underlying real estate.

Properties slated for sale include OK Mbuya Nehanda, OK Glen View, Birmingham Warehouse, OK Gweru, OK Malvern, Stand 6464 Ordar Township, Stand 39 Odar Township Harare, Stand 19676 Borrowdale Harare, and a Mutoko stand.

Several of these assets have already been pledged as security: OK Mbuya Nehanda, OK Glen View, and Birmingham Warehouse are mortgaged to FBC Bank Limited; OK Gweru, OK Malvern, Stand 6464 Ordar Township, and Stand 39 Odar Township are pledged to National Building Society; while Stand 19676 Borrowdale Harare is pledged to CBZ Bank Limited.

"Given prevailing market conditions, the properties offering the greatest saleability and value realisation will be prioritised for disposal," the company noted.

The rights offer will involve issuing approximately 1.83 billion new ordinary shares, enabling existing shareholders to subscribe for 1.37 new shares for every share held as of the record date, July 21, 2025. Payments for the rights offer will be accepted exclusively in US dollars.

OK Zimbabwe reported that it currently owes more than US$30 million to creditors, with the bulk of this amount overdue. The debts include US$24 million to suppliers, US$5.12 million in other payables such as utilities and services, and US$880,000 in statutory obligations.

The company emphasised that the rights offer and asset disposals are not isolated measures but key components of a comprehensive turnaround strategy aimed at restoring financial health, improving operational efficiency, and enhancing shareholder value.

"The company is entering a transformative period underpinned by a clearly defined turnaround strategy aimed at restoring financial strength, operational efficiency and long-term shareholder value," the circular stated.

"This strategy reflects a bold recalibration of the business and its leadership."

OK Zimbabwe's move highlights the challenges facing the retail sector in the country as companies grapple with liquidity constraints and a difficult economic environment.

The company did not immediately respond to requests for further comment.
- Newsday

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