By Business Reporter – Reappointed to steady a sinking ship, OK Zimbabwe’s former chief executive Willard Zireva has returned as executive chairman with the monumental task of rescuing the retail giant from a US$30 million debt crisis.
Zireva, who retired from the company after more than two decades at the helm, was recalled following the abrupt resignation of chairman Herbert Nkala and the voluntary departure of top executives, including former CEO Maxen Karombo, CFO Phillimon Mushosho, and supply chain director Knox Mupaya. The restructuring was prompted by sustained losses, poor debt management, and weakening supplier confidence.
At the heart of the turnaround plan is a comprehensive capital-raising initiative aimed at restoring financial stability. OK Zimbabwe intends to raise US$30.5 million—US$20 million through a renounceable rights offer and US$10.5 million from selling selected immovable assets. The rights issue will see shareholders offered 1.37 new shares for every share held, at a discounted price of US$0.0109, payable in US dollars.
A shareholder circular reveals that 73 percent of the issued share capital—comprising NSSA, Datvest Nominees, and Old Mutual—has already pledged full support through irrevocable commitments and underwriting guarantees. The remaining US$5.4 million remains uncommitted, though the company has secured underwriting arrangements to cover any shortfall. Notably, safeguards are in place to ensure no shareholder exceeds the 35 percent ownership threshold, thereby avoiding regulatory triggers.
The raised capital will primarily go towards settling overdue obligations—US$24 million owed to suppliers, US$5.12 million for other payables like utilities and services, and US$880,000 in statutory obligations. Reducing the debt burden is expected to lower the company’s annual finance cost, which currently sits at an unsustainable US$3.1 million.
Property sales will focus on high-value, high-demand assets, with proceeds used to bolster working capital and support capital expenditure. Sales of occupied properties will proceed only with long-term lease-back agreements to maintain operational continuity. NSSA has expressed interest in acquiring OK Gweru and OK Malvern branches for US$4 million, subject to due diligence.
Internally, OK Zimbabwe is addressing historical missteps, including inefficient capital allocation, poor cash flow management, delayed supplier engagement, and lack of agility in responding to market trends. Externally, the company is grappling with intense competition from informal retailers who benefit from regulatory leniency and lower operational costs.
To stabilise operations, a seasoned interim management team is in place. Zireva is joined by former CFO Alex Siyavora and newly appointed supply chain director Muzvidzwa Chingaira. Their mandate runs until the end of the current financial year, after which a substantive executive team will be installed to implement the recovery strategy with renewed rigour.
The renounceable rights offer opens on July 21, 2025, and closes on August 4, 2025. Trading of the new shares will commence immediately after allotment, marking a critical juncture in the retailer’s bid to regain its financial footing and restore trust among suppliers and shareholders.