Africa-Press – Zimbabwe. Resources group RioZim Limited is seeking to raise US$39,4 million through a mix of borrowing and asset disposals as it moves to extinguish debt and recapitalise its remaining mining assets.
The capital-raising plan follows a recent High Court decision dismissing an application by the Zimbabwe Diamond and Allied Minerals Workers Union to place the company under corporate rescue.
The ruling has cleared the way for the resources firm to pursue a turnaround strategy after years of operational challenges driven by rising production costs, persistent power cuts, exchange-rate volatility and frequent plant breakdowns, among others.
“RioZim Limited seeks to address balance sheet concerns and restore profitability by raising funds through the disposal of several assets and claims which will be directed towards extinguishing debt and capitalising the remaining mining assets,” RioZim said in a circular to shareholders published yesterday.
An extraordinary general meeting (EGM) of shareholders has been scheduled for April 22 to approve the proposed capital-raising plan.
At the meeting, shareholders will consider five resolutions, including the disposal of non-core investment properties in Nyanga and Newlands for minimum consideration of US$165 000 and US$254 000, respectively. The properties will be sold to non-related third parties, subject to board approval.
Shareholders will also be asked to authorise the company’s directors to secure a loan facility of up to US$35 million, backed by company assets of equivalent value, on terms to be agreed with a lender and approved by the board.
The EGM will further consider the proposed transfer or disposal of two assets to RZM Murowa (Private) Limited in exchange for a full waiver of a US$60,78 million loan owed by RioZim to the company.
The assets include RioZim’s 22,2% shareholding in RZM, valued at US$23,85 million, and four diamond mining claims currently held by RioZim but used by RZM, valued at US$4,6 million.
Shareholders will also vote on the disposal of additional mining claims, subject to guidance from the Zimbabwe Stock Exchange.
These include the proposed sale of the Mtandahwe Copper & Tungsten claim to an unrelated third party for not less than US$3 million, and the One-Step gold claim for not less than US$1 million, with an option allowing the buyer to exit if resources prove unsuitable or increase the price if in-situ gold resources exceed 400 kilogrammes.
Additionally, shareholders will consider ratifying the disposal of a property in Msasa by a subsidiary for US$1,6 million to an unrelated third party.
The outcome of the EGM is expected to be announced two days after the meeting.
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