Roadwin Chirara/Chris Goko
ZIMBABWE Stock Exchange-listed Powerspeed Electrical Ltd says it will not pay a dividend because it is still battling to service its $2 billion Productive Sector Facility (PSF) loa
n to the Reserve Bank of Zimbabwe.
Financial director, Joey Gov-ender, said the company’s shareholders would have to wait a little longer because Powerspeed was still repaying its loan to the central bank.
“Basically we have to service our Productive Sector Facility loan and the central bank would not have allowed us to declare a dividend while we have an outstanding loan,” said Govender.
He said the company’s board had agreed on the decision as part of policy “rationalisation measures”.
He said part of the funds would be used to buy stocks for the company’s manufacturing operations.
“It was also decided to invest in stock and this we believe will be sufficient to take us into the future as a company,” he said.
He said sales volumes were good, leading to Powerspeed buying the remaining shareholding in electrical and lighting manufacturer, Clipsal Zimbabwe.
The deal saw 19 million shares valued at $1,2 billion changing hands, paving the way for the remaining 49% shareholding in the company to be taken up.
“We believe it’s a strategic acquisition for the company and will go a long way in adding value for shareholders.”
He said the company had approved the relocation of its Zambian operations
from Kitwe to Lusaka, Zambia, which will also house the head office for operations in that country.
“We had little success in Kitwe and we hope to use Lusaka as a springboard for the company through wholesaling of our products and a head office in the city will likely provide a boost for the company,” Govender said.
He said the lack of proper management structures in the Kitwe operations had contributed to the problems, leading to increased expenses.
“We had huge problems and management operating the branch really did not understand what the company was about. The branch did not add real value to the company,” said Govender.