PG Industries (Zimbabwe) Limited has sold its controlling stake in subsidiary Zimboard Products Limited to a South African company, PG Bison.
Chief executive officer Gerald Mujaji said 25 November 20…
PG Industries (Zimbabwe) Limited has sold its controlling stake in subsidiary Zimboard Products Limited to a South African company, PG Bison. Chief executive officer Gerald Mujaji said 25 November 2004 that he was unable to comment on the sell-off because of strict Zimbabwe Stock Exchange (ZSE) rules. The sell-off has reportedly been approved by the Reserve Bank of Zimbabwe (RBZ). Zimboard was one of three autonomous subsidiaries in the ZSE-listed PG Industries group. The other two subsidiaries are PG Merchandise and Plate Glass. The transaction is expected to be worth between ZWD 5 billion and ZWD 10 billion and could go some way towards alleviating debt at the group, which is expected to report a high gearing ratio for the half-year to 30 September 2004. The group had once tackled high levels of debt by disposing of its properties in the capital, Harare. However, economic difficulties have pushed the firm into a new era of indebtedness. In a cautionary statement ahead of the release of interim results for the six months to 30 September 2004, PG Industries said it was expecting a poor half-year performance. “The economic difficulties experienced by the group in the 4Q of last year continued in the 1H of the current year. These have been characterised by foreign currency shortages, high interest rates and low domestic demand, particularly in the furniture and construction sectors,” the group said in its statement. It added that export viability had continued to be hit by rising operational costs that had not been balanced by an increase in Zimbabwe dollar revenues. “The group has not yet been able to convert all debt to cheaper productive sector funding. While merchandising continues to perform satisfactorily and has been able to withstand these difficulties, the group“s manufacturing businesses suffered most from the deteriorating environment.”