HomeBusiness DigestClan shareholders approve Pioneer acquisition

Clan shareholders approve Pioneer acquisition

Eric Chiriga

CLAN Holdings Ltd (Clan) shareholders have unanimously approved the acquisition of Pioneer Transport Ltd (Pioneer), to form a new company called Pioneer Africa Ltd.

T face=”Verdana, Arial, Helvetica, sans-serif”>”The deal has finally been approved and both companies have merged to form one company called Pioneer Africa Ltd,” said Clan chief executive officer Harvey Leared at the extraordinary general meeting on Wednesday.

To fund the acquisition, Clan has embarked on a 2,66 for one renounceable rights offer at a subscription price of $25 per rights offer share.

Clan seeks to raise 7,5 billion through the rights offer and will acquire the entire issued share capital of Pioneer which was owned by the Rudland family.

The acquisition price of $7 499 205 000 is payable as to cash in the amount of $4 777 367 581 and the balance in the amount of $2 721 837 419 through the issue of commercial paper.

The Rudland family, the sellers of Pioneer, is entitled to the proceeds from the sale of Pioneer amounting to $7 499 205 000. However, the entire proceeds are to be reinvested in Clan.

Clan is a holding company for a group of businesses involved primarily in the road transport industry across Zimbabwe.

It consists of five main operating entities – Clan Transport, DD Transport, Trentyre, Trek Express and Skynet.

On the other hand, Pioneer is a customer-oriented transport business with a well-established brand.

It is a major player in both the freight and passenger sectors of the Zimbabwe transport industry.

Following approval of the acquisition, Messrs Kudenga and Simon Rudland were appointed as directors on the board of the enlarged Clan group with effect from the date of approval.

Directors of Clan proposed a restructuring of Clan’s share capital because trading of the company’s ordinary shares on the Zimbabwe Stock Exchange was reasonably illiquid which made investment inaccessible to a broader pool of potential investors. The restructuring will be achieved through an increase in the company’s authorised share capital from 114 000 000 ordinary shares of a nominal value of 25 cents per ordinary share to 600 000 000 ordinary shares of a nominal value of 25 cents per ordinary share. The directors also seek to secure the funding of on-going capital expenditure and working capital requirements.

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