HomeBusiness DigestGeneral Beltings in $55 billion rights issue

General Beltings in $55 billion rights issue

Eric Chiriga

GENERAL Beltings Ltd has proposed a $55 billion rights issue to recapitalise its merged operations with Cernol Chemicals (Pvt) Ltd and pay off SMM debts.

dana, Arial, Helvetica, sans-serif”>Under the terms of the rights offer, 346 904 549 shares in the unissued share capital of General Beltings will be offered to shareholders on subscription date in cash at a price of $160 each, in the ratio of 11 new rights offer shares for every five ordinary shares held.

The company intends to merge with Cernol in a transaction where 68 847 894 fully paid-up ordinary shares in General Beltings will be issued to the shareholders of Cernol.

In exchange, General Beltings will acquire the entire issued share capital of Cernol, thereby achieving total ownership, including its immovable assets.

General Beltings will pay the expenses amounting to approximately $5 billion out of the proceeds of the rights offer.

“Given the need to recapitalise the merged business and to extinguish SMM debts and provide working capital, the directors have proposed to raise capital by way of a renounceable rights offer,” Godfrey Nhemachena, the chairman of General Beltings, said.

He said the inclusion of Cernol in the enlarged group was expected to increase the group’s earnings to a level befitting a company listed on the Zimbabwe Stock Exchange (ZSE).

He said the merged entity would be able to gain critical mass and become a dominant player in the various segments of the industry it operates in.

However, Nhemachena said the transaction was subject to the approval of the Minister of Justice, the administrator of SMM and the ZSE.

The SMM holds 55% and 100% shareholding in General Beltings and Cernol respectively.

Nhemachena said the transaction shall remain effective unless the merger was rejected by the Competition and Tariff Commission.

General Beltings has two divisions, namely Pigott Maskew and General Beltings, and General Tire, a dormant company.

The General Beltings division manufactures and distributes gryphon conveyor belting while the Pigott Maskew division is involved in the manufacturing and distribution of rubber products.

On the other hand, Cernol is engaged in the manufacture, importation and distribution of various chemical products used for commercial and industrial cleaning, treatment of water and several other uses.

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