OK Zimbabwe Reverses Mbare, Entumbane Closures as It Eyes US$30 Million Capital Raise by June

09 May 2025

By Charity Chikara

OK Zimbabwe Limited has reversed its decision to shut down its Mbare and Entumbane branches as part of a broader strategic shift, while discussions to raise US$30 million in capital to stabilise operations and clear debt are now at an advanced stage.

The retailer, Zimbabwe’s largest by footprint, is targeting to complete the capital-raising process and receive the funds before the end of June 2025. The capital will be raised through a combination of a rights issue, private placement, and debt instruments.

Chief Executive Officer Mr Willard Zireva, who recently returned to lead the company after stepping down eight years ago, expressed confidence in the progress made so far.

“Currently, we are finalising discussions with potential underwriters, and we are targeting to have the whole process completed and cash received before the end of June 2025,” he said in an interview.

Mr Zireva added that most of the major shareholders had already committed to follow their rights, which he described as a vote of confidence in the retailer’s turnaround strategy.

The decision to raise fresh capital follows a board resolution passed last month, aimed at bridging a funding gap, clearing creditors, and stabilising the company’s liquidity position to restore normal business operations.

OK Zimbabwe has faced growing operational difficulties, including stock shortages and broken supplier relationships due to unpaid debts. The company is reportedly saddled with US$17 million and ZWG537 million in outstanding obligations. Some suppliers withheld deliveries, demanding full settlement before resuming trade.

In March 2025, the company had announced the closure of six underperforming outlets and the layoff of affected staff. However, Mr Zireva has since reversed the planned closure of OK Mbare and Entumbane, describing them as critical to the company’s revised operations strategy.

“The closure of some stores was being pursued by the previous management. Since my return, we have reviewed the strategy and are now taking a different approach,” he said.

The capital injection is expected to stabilise operations, unlock working capital, and enable the business to reposition itself in a competitive retail environment.

In a cautionary statement, the company said a circular will be issued to shareholders detailing the transaction and notice of an Extraordinary General Meeting.

“Accordingly, shareholders and the investing public are advised to continue exercising caution when dealing in the company’s shares. Further announcements will be made under regulatory requirements as and when there are material developments,” the statement read.

Analysts say the return of Mr Zireva and the renewed strategy could mark a turning point for the retailer, provided the recapitalisation is successful. The sector continues to face pressure from currency instability, subdued consumer spending, and competition from informal traders.