HARARE, July 19 (The Source) – Ariston Holdings major shareholder Origin Global Holdings Limited is seeking to shore up its stake in the agriculture concern through a debt to equity transaction.
As at 30 September 2015, Ariston Holdings debt to Origin Global Holdings, inclusive of shareholder loans, stood at $5,5 million.
In a circular to shareholders, the agricultural concern will seek approval of the transaction at an extra ordinary general meeting to be on August 10, 2016.
“This will free the Company’s cash flow and reduce the interest burden for Ariston and in turn enhance the profitability of the company,” it said.
The transaction also includes a waiver by the majority shareholder of an interest amounting to $1,5 million by Origin and Afrifresh.
The rational of the transaction implies that remainder of the shareholder debt, $4 million, be converted at a conversion price of $0.018 into 222,200,000 ordinary shares of a nominal value of $0,001 each, all of which are issued to Origin.
The group says approval of the transaction will result in meaningful savings to the company through reducing interest bill and will also free up the balance sheet to enable the company to raise cheaper, long term financing.
Origin owns about 68 percent the Zimbabwe Stock Exchange listed horticultural firm and the equity-debt swap deal is part of balance sheet restructuring.