PG fails to pay creditors, looks to prospective investor for salvation

PG fails to pay creditors, looks to prospective investor for salvation

HARARE, October 26 (The Source) – Hardware retailer PG Industries has failed to pay up unsecured creditors due to cash flow constraints but said it negotiating with a prospective investor who could inject fresh capital into the struggling firm.

The company has been under a High Court sanctioned scheme of arrangement since April designed to protect its assets while it restructures its debts.

PG said in June it would start making quarterly payments to unsecured creditors this month but in a Friday notice on the Zimbabwe Stock Exchange (ZSE), the company said it was unable to make the payments to concurrent creditors due on  October 16th due to cash flow constraints.

“PGIZ directors have received a written expression of interest letter from a prospective international investor who completed a due diligence of PGIZ earlier this year,” said the company. A successful conclusion of the discussions could mean a change in its shareholding, a new payment plan to creditors and capital injection in the company.

It said the Secured Lenders’ Scheme has been implemented in full. Debentures and accrued interest totalling $7,162,530 have been converted to ordinary shares at a conversion rate of US$0.001.

After the conversion of debentures and a private placement earlier in the year, Old Mutual Life Assurance Company of Zimbabwe Limited 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.

The company’s shares were suspended from trading on the local bourse in 2013.