Business

Edgars in $70m rights offer

LISTED Edgars Zimbabwe is seeking for the shareholders’ nod to raise $70 million through a rights offer geared towards capitalising business, the clothing company has announced. BY FIDELITY MHLANGA Already, an extra-ordinary general meeting (EGM) to deliberate the issue has been slated for June 16, 2020. “The board of directors of Edgars has resolved that, subject to the approval of shareholders, the company be authorised to raise $70 000 000,” Edgars said in a circular. “The board is proposing a renounceable rights offer to recapitalise Edgars by way of a rights offer of 274 745 630 ordinary shares of a nominal value of $0,01 each, at a rights offer price of $0,2548 per share, on the basis of five new ordinary shares for every six ordinary shares in issue as at the record date. The Rights...

Banks face US$ refund Bill: Veritas

LOCAL legal think-tank Veritas says if the Supreme Court upholds the High Court of Zimbabwe decision dismissing the central bank regulation that separated Real Time Gross Settlement (RTGS) and nostro accounts, banks will have to refund their clients in United States dollars. BY TATIRA ZWINOIRA On May 14, High Court judge Justice Happias Zhou ruled that central bank regulation Exchange Control Directive RT120 of October 2018, which separated foreign currency accounts into locally and foreign currency-denominated ones, was unconstitutional. What this means is that banks owe their depositors the US dollars they had in their foreign currency accounts (FCAs) as at October 3, 2018, a day before the central bank regulation was issued. However, Finance minister Mthuli Ncube and the Reserve Bank of...

ASX quizzes Zimplats over financials

THE Australian Securities Exchange (ASX) has put Zimplats Holdings Limited under spotlight, questioning whether its accounts for the half year ended December 31, 2019 gives a true representation of its financial performance and position BY MTHANDAZO NYONI Zimplats, registered in Guernsey, is listed on the Australian Stock Exchange. In a letter dated April 6, 2020, ASX adviser, listings compliance Lin Kang asked Zimplats to explain its position following the independent auditor’s report qualified opinion which raised a number of grey areas in its half year accounts for the period to December 31, 2019. According to the independent auditor’s report attached to the half year accounts, Zimplats transacted using a combination of United States Dollars (US$), bond notes and coins, real time gross ...

RBZ raises gold forex retention threshold

FIDELITY Printers and Refineries (FPR), a subsidiary of the Reserve Bank of Zimbabwe, has raised the foreign currency retention threshold for gold miners to 70%, up from 55% . By Tafadzwa Mhlanga “Gold producers shall be paid under a 70/30 payment arrangement scheme in terms of which 70% of the gold sale proceeds shall be paid into the producers’ nostro account and the balance shall be paid in local currency at the ruling exchange rate in to the producer’s Zimdollar account,” FPR general manager Fredrick Kunaka said in a statement yesterday. “Small-scale gold buying agents and artisanal producers shall be paid in cash at a flat price of forty-five United States dollars per gram of gold.” He said large-scale gold buying agents must have a mining operation producing a minimum of 50 kilogramm...

Padenga eyes growth

CROCODILE skin and meat supplier, Padenga Holdings Limited (PHL) expects growth for the year on the back of Chinese and European economies re-opening following the COVID-19-induced lockdowns. BY TATIRA ZWINOIRA In its annual report for the year ended 2019, released last week, PHL recorded a near 8,3% drop in profit after tax to US$6,74 million from a 2018 comparative of US$7,35 million. The group’s 2019 performance was affected by “evolving market conditions impacting on skin prices and increased costs inherent in meeting social licence expectations and the implementation of measures to address enhanced skin quality expectations. “Although closed for much of March/April, French tanneries were anticipating to re-open mid-April and product supply has thus far not been interrupted. Chinese ma...

Prospect completes rights issue

AFRICAN lithium company, Prospect Resources (Prospect) has successfully completed its rights issue, raising approximately A$2 million (US$1,304 million), managing director Sam Hosack has revealed. BY MTHANDAZO NYONI Prospect last month announced a non-renounceable rights issue to shareholders on a one-for-four basis at A$0,05 per fully paid ordinary share to raise approximately A$3,1 million, with a minimum A$1,2 million. “I am pleased to announce that Prospect Resources has successfully completed our rights issue, raising approximately A$2m. The past two months have been a turbulent time for most facets of the global economy as well as Prospect, our shareholders and our staff. As shareholders are aware, we have significantly reduced our workforce and overall cost base,” Hosack said in a s...

Zimbabwe’s land reform areas twenty years on (3)

This blog focuses on Masvingo’s villagised land reform areas (where people have an individual arable plot, live in villages and share communal grazing). Our sites (N=99) are nearby the self-contained schemes in Gutu and Masvingo districts discussed in the last blog in this series, and they share many similarities, with a focus on maize production, combined with horticulture. There are fewer who are accumulating significantly, but there are still many who are doing well. Households in these sites are slightly younger, with the average age of the household head being 43, and there are fewer women who are the main household head (19%), although 41% of households have a de facto female head due to absent husbands. Today, 47% of household heads have off-farm jobs (some quite informal ...

COVID-19 delays April inflation stats

THE Zimbabwe National Statistical Agency (ZimStat) says it has delayed the publication of last month’s inflation figures due to the COVID-19-induced lockdown that crippled the data collection process. BY FIDELITY MHLANGA Traditionally, ZimStat releases inflation data on the 15th of each month. Treasury resumed publishing annualised inflation figures in February after a one-year suspension when the country reintroduced the Zimbabwe dollar. “We apologise for the delay in publishing April 15, 2020 inflation statistics which were supposed to be released today May 15, 2020, but has been delayed due to issues related to COVID-19 ZIM/lockdownZIM. These stats will be published upon finalisation of data processing,” ZimStat announced on Twitter. Contacted for comment, ZimStat prices statistics mana...

Weakening Zimdollar wreaks havoc

MARKET forces have caused havoc on the Zimbabwe dollar on the parallel market, with the exchange rate shooting to US$1:$70. BY TATIRA ZWINOIRA Last week, from Monday to Saturday, the US$:Zimdollar rate plunged nearly 23%, with tobacco farmers reportedly calling on government to urgently address the currency instability. The rapid deterioration has dramatically exposed the futility of government’s decision to reintroduce the local unit as the sole legal tender in June last year as all efforts to curb the rising exchange rate have fallen flat. Reserve Bank of Zimbabwe governor John Mangudya last week told Parliament that parallel market dealers were like coronavirus. “The Zimdollar experiment and ‘policy missteps’ were never going to succeed because the right institutions, i.e a strong and i...

Cost of living increases to $7 171

THE cost of living in Zimbabwe skyrocketed by $324 to $7 171 by end of April last month due to an increase in fuel prices, limited supply of basic products as well as panic-buying by consumers because of the lockdown, a new report has revealed. BY MTHANDAZO NYONI At the end of March, the figure stood at $6 846,80. A survey conducted by the Consumer Council of Zimbabwe (CCZ) showed that the cost of living for a family of six shot up by 4,74% to $7 171 in April. The food basket increased by 4,61% to $4 116,55, while the price of detergents increased by 58,35% to $388,17. Almost all basic commodities in the period under review registered an increase. These include margarine, sugar, tea leaves, fresh milk, flour, rice, onions, cabbage, salt, meat, bath soap, laundry bar and washing powder. Dec...

Oil giant pushes castor bean production

LEADING oil processing giant company, Castor Oil, has embarked on a programme to support small-scale and commercial farmers in growing the essential castor beans crop, which the firm believes has a potential to boost Zimbabwe’s fuel capacity. BY BRENNA MATENDERE/ TERRY MADYAUTA In an interview with NewsDay Business yesterday, Castor Oil Zimbabwe chief executive Careen Yosef said the conglomerate was willing to support more farmers in the country who were willing to specialise in engineered castor beans production. “We are encouraging farmers from across the board to take up this income-generating plant. As you might know, castor bean can be used in the production of cosmetics, but most importantly, it can be used in the generation of fuel,” he said. “We are ready to assist small-scale farm...

Lafarge braces for 30% sales plunge

SWISS-BASED cement maker Lafarge Holcim’s local unit, Lafarge Zimbabwe says it expects sales volumes to plunge 30% year-on-year in the second quarter of the year due to the COVID-19-induced lockdown. BY FIDELITY MHLANGA “The declaration of the COVID-19 outbreak as a pandemic and the national lockdown effected from March 30 has an inevitable impact on Q2 2020 volumes. It is projected that Q2 2020 volumes will decline by 30%, with the possibility of spillover risks impacting the second half of the year,” company secretary Flora Chinhaire said in a trading update. The company said while the ripple effects of the lockdown and border closures were still to be fully quantified, the effects of the COVID-19 outbreak was envisaged to spill over into the second half of the year. “The net effect will...