HARARE: Struggling PG Industries Zimbabwe Limited (PG) plans to convert a total $7.1 million debentures into equity. The group said the conversion, at a price of $0.001, will include accrued and unpaid interest. The $7.1 million comprises $6, 72 million capital and $415 681 interest.
“In accordance with the scheme of arrangement proposed by PG with its debenture holders on January 24, 2014, the company will convert debenture… into equity,” the group said.
Last month, the hard pressed company’s plans to register its debt repayment plan with the High Court hit a snag after one of the creditors raised concern over the scheme.
The group owes various creditors nearly $12 million and sought to file a scheme of arrangement a court approved agreement between a company and its shareholders or creditors with the Court.
Kudakwashe Waniwa, PG’s secretary, said “the matter shall be set down and resolved favourably during the first quarter of 2015.”A scheme of arrangement may be used for rescheduling debt, and may have effect on mergers and amalgamations and might alter shareholder or creditor rights.
Under the scheme, balances owed as at September 2014, would be paid over a 30-month period, after an initial grace period of six months from the date of registration with the High Court.
The group’s acting chairperson, Francis Dzanya, last year said debenture holders also agreed to convert their $6,7 million debentures into equity.The conversion will result in annual interest savings of $672 000. The debentures are due for payment in December 2015.
To support balance sheet restructuring initiatives, the group has proposed to raise an additional $3,5 million through facilities with local institutions, with $1,1 million already secured.
