HomeBusinessRioZim in major capital raising drive

RioZim in major capital raising drive

The plan now awaits the nod from shareholders at an extraordinary general meeting on December 5. In a notice to shareholders, RioZim said the mega capital raising exercise would be done through offering new shares to existing shareholders.

This would be done through issuing 66 688 889 ordinary shares of a nominal value of US$0, 01 each in the company’s share capital at a subscription price of US$0,45 per share to existing shareholders of ordinary shares in the company at a ratio of 22,24 new ordinary shares for every 10 ordinary shares already held by shareholders in the company.

As an ordinary resolution the RioZim wants the EGM to approve the debt equity swap to selected lenders of the company.
RioZim owes US$29 million to banks.

If the resolution is approved, RioZim is to issue 43 939 394 new ordinary shares at a price of US$0,66 per share to selected lenders who are owed US$29 million to give effect to the debt equity swap.

RioZim told shareholders that it is in discussions with potential underwriters to the rights offer and full details of the underwriting arrangements would be provided in a circular to shareholders.

Last year, RioZim wanted to raise US$40 million to recapitalise existing operations. The plan never took off after it failed to secure an underwriter for the transaction.

RioZim mines gold at Renco Mine and does toll refining at Empress Nickel Refinery. The multinational company also has a 22% shareholding in diamond miner, Murowa.

A number of RioZim creditors are banks and they would end up holding shares in the gold and diamond miner. However, Standardbusiness understands that there are a number of investors who are willing to buy the debt and this will relieve them as they have money tied up in RioZim.

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