Pioneer submits updated indigenisation proposal

Published: 16 September 2013

PIONEER Africa Corporation has submitted an updated compliance proposal of its indigenisation plan and is now waiting for Government's response.

Group chief executive officer of Pioneer Corporation Mr Albert Ushe said the company was hoping to get a response soon following the appointment of a new Cabinet last week.

"We have submitted our latest proposal to the National Indigenisation and Economic Empowerment Board and we are just waiting for a response," Mr Ushe said.

"Since Cabinet has been announced, we hope that we will soon get a response, they have been asking for information and we have been giving them (the additional details)," Mr Ushe added.

President Mugabe named a 26-member Cabinet last week after Zanu-PF won the 31 July harmonised elections and the ministers immediately got down to work.

Several other big companies from across various sectors of the economy, including Old Mutual, Zimplats, Mimosa Mining, Unki and BAT have already submitted their plans.

Companies in Zimbabwe are required to obtain indigenisation compliance certification while foreign owned firms are compelled to sell 51 percent to indigenous people as espoused in the Indigenisation and Economic Empowerment Act.

The company is also seeking Government approval for a transaction in which it acquired fellow transport and logistics concern Unifreight Swift in August 2011.

While the transaction has already received the endorsement of the ZSE and the Competition and Tariff Commission, it is yet to get the thumbs up from the Government.

Pioneer said it will not include Unifreight's financial results when it presents accounts for the half year to June 2013 because of this issue.

"We are still consulting on the issue, the ZSE and the Competition and Tariff Commission have approved the transaction, but we can't incorporate UniFreight results in the half year."

Pioneer acquired Unifreight Swift in a $7,2 million deal seeking to reposition itself as a leading player in the transport sector.

Once all the regulatory approvals are obtained Pioneer is expected to issue a total of 514 974 875 shares of $0,008 each for the purchase consideration of $4 million.

But to provide for the issuance of new shares ZSE listed firm will raise its authorised share capital from 600 million ordinary shares to 1,4 billion ordinary shares.

Pioneer will also take up $900 000 Unifreight, pay $1,5 million for the Swift brand over five years and $711 000 for Unfreight's IT system payable over three years.

After completing the acquisition the transport and logistics company will see the value of its asset base increasing by a significant $12 million to about $30 million.

Pioneer will acquire trucks, trailers, vehicles and equipment from Unifreight as the group bids to regain the market share it lost during the past decade.
- chronicle