By Business Reporter-OK Zimbabwe, the country’s largest retail chain by branch network, is battling to raise US$30 million in fresh capital as it reels from a crippling liquidity crunch exacerbated by the recent introduction of the Zimbabwe Gold (ZiG) currency and a deteriorating macroeconomic environment.
The company has issued a further cautionary statement to shareholders and the investing public, disclosing that discussions around the proposed capital raise are at an advanced stage and nearing finalisation. The planned equity injection aims to restore working capital, settle mounting supplier debts, and finance strategic refurbishments and digital upgrades across its nationwide store network.
“Discussions regarding the proposed US$30 million capital raise are now at an advanced stage and nearing finalisation,” said company secretary Mrs. Margaret Munyuru. “A circular incorporating notice of an extraordinary general meeting (EGM) will be published once final terms are agreed.”
The capital raise follows a January 2025 statement in which the company announced the closure of five underperforming stores in Harare and Bulawayo. The affected branches include Robson Manyika, Glen Norah, Kuwadzana Express, and Mbare in Harare, as well as Chitungwiza Town Centre. The shutdowns resulted in the retrenchment of hundreds of employees, with the company offering a severance package of one month’s salary per year of service, three months’ notice pay, and settlement of accrued leave days.
While management cited the “challenging trading environment” for the closures, analysts say the problems run deeper. By the end of 2024, OK Zimbabwe was facing a liquidity crisis, with key suppliers halting deliveries over unpaid invoices totaling around US$17 million and ZiG537 million in local obligations. This led to widespread stock-outs, a sharp decline in customer footfall, and plummeting sales — all of which compounded the retailer’s financial troubles.
The recent transition to the ZiG currency — introduced in April 2024 to replace the rapidly depreciating Zimbabwean dollar — has added further pressure on businesses.
Though intended to stabilize the local economy, ZiG’s limited availability and volatility have disrupted pricing, payments, and supplier relations, especially for large retailers like OK Zimbabwe that rely on both local and imported stock.
Retailers now face the dual challenge of accessing scarce US dollars for imports and navigating fluctuating exchange rates when converting ZiG to hard currency.
In addition to currency volatility, analysts have questioned OK Zimbabwe’s financial strategy. The company continued to declare dividends even as its cash flow deteriorated. In March 2022, it paid a US dollar dividend of 0.13 cents per share (approximately US$1.7 million), followed by a 0.15 cent dividend in March 2023. Just five months later, the company took out a US$5 million loan at a 7.5 percent interest rate — a move that drew criticism for prioritising shareholder returns over operational stability.
“While attractive to investors, these dividend payouts appear to have weakened OK’s ability to maintain sufficient working capital,” said a banking sector analyst. “The 2023 loan was a stopgap. This new capital raise must address the structural causes of the shortfall.”
According to Munyuru, the bulk of the capital raise will go toward clearing supplier debts and replenishing stock. A portion will also fund the refurbishment of high-traffic outlets and the upgrade of digital supply chain platforms aimed at improving inventory management and minimising stock-outs.
The board has engaged a consortium of local and international investors to underwrite the deal. Once terms are finalised, shareholders will receive a circular detailing the equity issuance and any changes to the company’s Memorandum and Articles of Association. The transaction will require shareholder approval at the forthcoming EGM.
“Restored supplier confidence could enable OK Zimbabwe to replenish its shelves and recapture lost market share,” added Maeresera. “Meanwhile, the planned refurbishments and digital enhancements could improve the customer experience and help the retailer compete more effectively in an increasingly tough environment.”
Until the capital raise is concluded, Munyuru said the company will continue updating shareholders “in accordance with regulatory requirements as material developments occur.”
As Zimbabwe’s economy teeters on the edge of another crisis, OK Zimbabwe’s fate may foreshadow the challenges facing the wider retail sector — where the intersection of currency instability, low consumer spending, and policy uncertainty has left many businesses fighting for survival.