Pelhams out to raise funds

Eric Chiriga

ELECTRICALS and household furniture company Pelhams Ltd (Pelhams) plans to launch a rights issue as part of its funding strategies, group executives have said.



e=”Verdana, Arial, Helvetica, sans-serif”>Company chairman Oliver Chidawu said yesterday: “The board has approved funding plans that include a rights issue and once these are in place the return to profitable trading is not in doubt.”


His chief financial officer Phineas Whata told businessdigest separately that they had other funding options, although he could not disclose the other instruments and the amount of money they intended to raise through the rights issue.


“We are operating in a very volatile financial market so the figure might change anytime,” Whata said, in reference to the rights issue.


He said management had agreed to pursue any “off-balance sheet” tools with other institutions that are agreeable to the conditions.


“The concept has already been agreed by management,” Whata added, a factor Chidawu had earlier referred to.


“Every option to secure off-balance sheet funding of credit sales is being explored,” Chidawu said.


Pelhams was until recently swamped by huge debts and the anticipated money-raising event was to fund operational activities.


Chidawu said the furniture company had overcome the debt problem and the accompanying interest rate exposure.


The crippling debts and an accumulative trade debtors book were transferred to a special purpose vehicle, charged with managing the debt issue using internal tools.


“The special vehicle is mandated to pay off debts using instalments received from debtors,” said the Pelhams chairman.

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