PG Industries reconstruction scheme gets court nod, creditors to be paid before year-end

PG Industries reconstruction scheme gets court nod, creditors to be paid before year-end

By Chipo Musoko, HARARE, June 3 (The Source) – Struggling hardware retailer PG Industries says it will start paying unsecured creditors in October after its court-sanctioned reconstruction scheme was approved and registered, the company said on Wednesday.

The High Court  sanctioned the scheme of arrangement between PG, its shareholders and creditors on April 1, which was registered by the Registrar of Companies on  April 16 and designed to protect the company’s assets while it restructured its debts.

“Quarterly payments to concurrent creditors will … commence on 16 October 2015, being six months from the effective date of the scheme,” said PG in a statement to the Zimbabwe Stock Exchange.

The company was suspended from the local bourse in 2013.

Secured creditors, who were owed $5,3 million, have so far been paid  $4,3 million through property sales and debt swaps, while the remaining balance of $965,082 was restructured to a three-year, 12 percent per annum long-term facility, it said.

The conversion process for the debentures and accrued interest amounting to $7,2 million had commenced, and the company expects to distribute shares to debenture holders by  June 30 this year.

To date, the company has raised $3,2 million through a  three-year loan;  $1 million through a rights issue and $1,1 million from sale of properties.

The company said it had also restructured the group to reduce overhead costs and enhance viability and would soon re-engage the Zimbabwe Stock Exchange with a view to having its suspension lifted.

After the conversion of debentures and the private placement, Old Mutual Life Assurance Company of Zimbabwe Limited has emerged as the major shareholder with 26.95 percent followed by African Banking Corporation (BancABC)  with 23.72 percent and Standard Chartered Nominees (Private) Limited with 21.09 percent.