PG Industries bailout confirmed

Source: PG Industries bailout confirmed | Daily News

HARARE – Dewei Investments (Dewei) says it will pay off PG Industries’ shareholders and creditors by the end of this month after the company received regulatory approval from the registrar of companies.

Under the agreed scheme of arrangement, Dewei Investment agreed to buy the entire PG Industries’ share register at a cost of $500 000.

It also agreed to provide working capital for the struggling retailer.

“Scheme members are hereby advised that the PG Industries (Zimbabwe) Limited Secondary Scheme of Arrangement (the scheme) was registered by the registrar of companies on October 19, 2018. In terms of the scheme, payments to scheme members and creditors will be made within five days after fulfilment of the last condition precedents,” Kudakwashe Waniwa, PG Industries company secretary, said yesterday.

Registration of the scheme by the registrar of companies is the last condition to be fulfilled.

Waniwa noted that the proposed investor is now proceeding to make payments based on amounts owing as at December 2015 as per scheme terms.

“Payments will be made as approved at the scheme meeting on September 15, 2016,” said Waniwa.

The meeting agreed that shareholders will be paid 0,0058 cents per share. And secured lenders will be paid amounts owed as at December 2015 less a 10 percent discount.
Preferred creditors will be paid 100 percent of the stated amounts.

The other agreement was that concurrent creditors will be paid 19,75 cents per dollar owed as at December 31, 2015 as full and final settlement of amounts owed as at that date.

The bailout had looked uncertain after the Indian firm missed the original deadline to make payment last year.

Dewei was supposed to make the payments, subject to regulatory approvals, after a secondary scheme of arrangement was approved by the High Court.

Rescuing PG Industries has been an uphill task as inadequate working capital has been the company’s biggest challenge, resulting in it resorting to expensive short-term bank borrowings. This resulted in the company recording huge losses owing to high finance charges.

PG Industries’ shares were suspended from trading on the local bourse in 2013, with analysts asserting that the company was technically insolvent.

— The Financial Gazette