HomeBusinessChidawu disposes of Zimplow stake

Chidawu disposes of Zimplow stake

BUSINESS magnate Oliver Chidawu has off-loaded his 32% stake in agro-implements manufacturer Zimplow.

The move comes barely a week after the company declared a dividend despite recording a slump in business.

Chidawu cashed in about US$3,2 million from the sale of 105 million shares. Earlier he had cashed in US$126 000 from dividends.

Analysts say this could be an indication of tough times that lie ahead of the company.

Market sources say Chidawu, who has interests in the banking, mining, and construction sectors, had been on the market for some time but had initially failed to get a price he wanted.

Zimbabwe Stock Exchange chief executive officer Emmanuel Munyukwi yesterday confirmed that Chidawu sold 105 million shares at US$0,03 in a “special bargain” or “special dispensation” where the buyer and seller are “happy” on the premium charged on the “special parcel”.

Chidawu yesterday confirmed the sale, but denied owning the shares. “I represent Metal and General Ltd on the board and I can confirm that they have sold,” However, market sources insisted that it was Chidawu who disposed of his shares.

As of yesterday, it was not clear who acquired the stake.

Businessdigest, however, understands that the deal was snatched by a foreign investor.

This, analysts say, could see board changes at Zimplow in line with shareholder changes.

The listed concern has about 327 million issued shares, which before the transaction were trading at just over US$0,25. In a statement attached to the just released financial results, Chidawu attributed the slow down in exports to loss of business in Angola, the company’s main market.

He said exports fell 53% in the same financial year.

“Export volumes declined by 53% putting them back to 2007 levels,” Chidawu said. “The decline was predominantly due to the exit of the Angolan market which contributed significantly on prior year exports. Drought and competition in East Africa also weighed down on our volumes there. Local volumes for full implements increased by 18% from the previous year. The local distributors started to recapitalise themselves again, and this has had a spin off effect on our implement sales.”

Mealie Brand, the group’s cash cow, recorded a 35% drop in sales compared to the previous year. CT Bolts, another subsidiary of Zimplow, however experienced a surge in sales posting an operating profit of US$132 597.

This overall decline in business, analysts said, could have led Chidawu to make an exit from the company, a move they said was a gesture of no confidence.

“I don’t see the company’s order book growing in the next five years,” said an asset management analyst who asked for anonymity. “For Chidawu, who is obviously privy to the intricate company position, this sale could be his vote of no confidence in the company.”

Zimplow once boasted of an enormous order book during the Reserve Bank-run farm mechanisation programme, a quasi fiscal intervention that was undertaken by the bank to supply farm equipment at concessionary rates.

The group posted a US$2,7 profit before tax and declared dividend at a time when most companies are still seeking recapitalisation.

Bernard Mpofu

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