By Business Reporter – OK Zimbabwe is facing a financial crisis, struggling to settle debts totalling over US$30 million.
The troubled retailer owes US$24 million to suppliers, US$5.12 million in other payables such as utilities and services, and US$880,000 in statutory obligations.
The company’s annual finance cost—currently at an unsustainable US$3.1 million—is expected to decline significantly if the debt burden is reduced.
In a bold move to rescue the business, OK Zimbabwe has reappointed former chief executive Willard Zireva as executive chairman.
Zireva, who led the company for over two decades before retiring, returns to steady the ship following the abrupt resignation of board chairman Herbert Nkala and the voluntary departures of several senior executives, including former CEO Maxen Karombo, CFO Phillimon Mushosho, and supply chain director Knox Mupaya.
The leadership reshuffle comes amid mounting losses, weakened supplier confidence, and ineffective debt management that have shaken the foundations of the once-dominant retail chain.
At the centre of the company’s recovery plan is a capital-raising initiative targeting US$30.5 million. Of this, US$20 million will be raised through a renounceable rights offer, while US$10.5 million will be secured from the sale of select immovable properties.
The rights offer will allow shareholders to acquire 1.37 new shares for every existing share held, at a discounted price of US$0.0109 per share, payable in US dollars.
According to a shareholder circular, major shareholders—comprising NSSA, Datvest Nominees, and Old Mutual—who collectively hold 73 percent of the issued share capital, have pledged full support through irrevocable commitments and underwriting guarantees. The remaining US$5.4 million is currently uncommitted, but OK Zimbabwe has secured underwriting arrangements to cover any potential shortfall.
Safeguards are in place to prevent any single shareholder from surpassing the 35 percent ownership cap to avoid regulatory complications.
The disposal of immovable property will focus on high-value, high-demand assets, with proceeds earmarked for working capital and capital expenditure. Where properties are occupied, sale agreements will include long-term lease-back arrangements to ensure uninterrupted operations. NSSA has already expressed interest in acquiring the OK Gweru and OK Malvern branches for a combined US$4 million, pending due diligence.
Internally, the company is addressing several operational inefficiencies that have compounded its financial woes—these include misallocated capital, poor cash flow management, delayed supplier engagement, and slow responses to changing market dynamics. Externally, OK Zimbabwe continues to face stiff competition from informal retailers who benefit from regulatory leniency and significantly lower overheads.
To guide the turnaround, a seasoned interim management team is now in place. Zireva is supported by former CFO Alex Siyavora and newly appointed supply chain director Muzvidzwa Chingaira. Their term runs until the end of the current financial year, after which a new executive team will be appointed to implement a long-term recovery strategy.
The renounceable rights offer opens on July 21, 2025, and closes on August 4, 2025. Trading in the new shares will commence immediately after allotment. The success of this capital-raising effort will be pivotal to OK Zimbabwe’s efforts to restore financial stability, rebuild supplier trust, and reposition itself competitively in the retail sector.