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PG to sell properties worth $22 billion

Roadwin Chirara

PG Industries Zimbabwe is planning to put on the market properties worth over $22 billion as part of efforts to retire its debt.

, sans-serif”>Pending shareholder approval, the properties targeted for disposal include industrial and residential properties.

PG Industries, which is heavily involved in the sale of construction products, has been battling to reduce its debt which stood at over $40 billion as of December 2004.

This was a sharp increase from the figure of $22 billion in the first half of the year.

In a notice to shareholders for the upcoming extraordinary general meeting scheduled for the end of the month, the company also plans to seek approval to dispose of some of its operational units.

PG Industries’ proposed debt restructuring exercise, if approved, seeks to pay off the huge debt while the company retains over $12 billion to be converted to a five-year 20% fixed interest debt instrument for the ailing company.

PG, which is listed on the Zimbabwe Stock Exchange, will dispose of its fixed assets in its subsidiary, Zimboard.

The deal will include the unit’s brand and trade names relating to its manufacturing business to a joint venture company (JVCO).

If approved by the shareholders, the JVCO will acquire the latter’s assets for US$4,3 million, which will in turn court PG Bison of Mauritius to subscribe to a 49% stake in the venture company at a fee of US$2,1 million while retaining a controlling stake of 51%.

In its notice to shareholders, PG Industries assets in Plate Glass will be acquired by two subsidiaries operating under two venture companies still to be formed.

The two proposed companies are expected to pay $19,6 billion for the assets, including the brand and trade names and inventories related to the operation of which PG South Africa is expected to take up 51% equity in the two venture companies for R9,99 million.

Although the deal is expected to seek central bank approval because of the foreign currency element, the exercise is expected to sail through smoothly at the EGM.

The PG Industries Zimbabwe share structure shifted in 2001 when the majority shareholders, the Lubner family, sold a 27% stake to Laserson Investment controlled by the former chief executive Gerald Mujaji and former financial director-cum-CEO Nyasha Zhou.

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