HomeBusiness DigestApex disposes $6,7b assets to Phoenix

Apex disposes $6,7b assets to Phoenix

Eric Chiriga

APEX Corporation of Zimbabwe Ltd (Apex) is disposing of two of its subsidiaries to Phoenix Consolidated Industries Ltd for $6,7 billion.

etica, sans-serif”>The subsidiaries are Bardwell Printers (Bardwell) and RCP Belmont Printers (RCP).

“Negotiations have been concluded for the acquisition of the business of Bardwell Printers and RCP Belmont Printers from Apex Corporation,” Mike Frudd, the chairman of Phoenix, said.

He said the transaction would not affect the shareholding structure of Phoenix.

However, Frudd said the transaction awaits the approval of the Competition and Tariff Commission and Phoenix shareholders.

Phoenix is set to hold an extraordinary general meeting (EGM) on October 24. The transaction is of a direct acquisition of all the assets and assumed liabilities of Bardwell and RCP at a total purchase consideration of $6 783 650 000.

He said the purchase consideration was arrived at based on an independent valuation performed by CB Richard Ellis.

“The purchase consideration is to be settled partly by settlement of debt due from Apex, and partly in cash, and the effective date of the transaction will be the date when all the conditions precedent have been fulfilled,” Frudd said.

Both Bardwell and RCP will become divisions of Phoenix and will be included in the company’s forthcoming financial results for the year ending October 31.

Phoenix took over the management control of Bardwell and RCP in April.

Frudd said that under the terms of the Sale of Assets Agreement entered into between Apex and Phoenix on September 16, Phoenix acquired control of RCP and Bardwell, again subject to the fulfillment of the conditions precedent.

“By the end of June, monthly turnover had been doubled and is expected to continue increasing. There is sufficient capacity to increase output by approximately 35% and management has been tasked with utilising this spare capacity,” he said.

For the four months – May to August – the unaudited profit of Bardwell and RCP amounted to $600 million.

Frudd said the directors believed that the printing businesses can actually be operated more profitably than they have historically been under Apex.

“In line with the existing risk prevalent in the Zimbabwean economy, the diversification into the printing industry would enable Phoenix to effectively pursue its hedging strategy without compromising profitability,” he said.

Apex Holdings Ltd owns 51% of Phoenix and is a wholly-owned subsidiary of Apex.

On the other hand, Apex Pension Fund owns 8,29% of Phoenix.

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