eBusiness Weekly
Over $9 million paid to creditors
Kudakwashe Mhundwa
An Indian firm, Dewei Investments, has completed takeover of PG Industries after the secondary scheme of arrangements to take over accrued debts that had been incurred by the construction materials firm was finalised.In 2016, Dewei Investments entered into an agreement with PG Industries to take over the entire issued share capital of the struggling construction materials firm for $500 000 with shareholders approving the transaction.
Part of the deal was that Dewei would pay all of PG’s creditors by November 30, 2016, but it failed to meet that initial deadline.
Another payment deadline set for October 2017 was also missed.
In a statement issued recently, PG Industries announced that the cancellation of old PG industry shares will result in Dewei Investments owning 100 percent of PG shares.
“Cancellation of old PG shares and issuance of new shares to Dewei Investments. Since all creditors in the secondary scheme and all transfer funds to pay all shareholders, First Transfer Secretaries have cancelled all shares held by existing shareholders and are proceeding to issue new shares to Dewei Investments. Dewei Investments will own 100 percent of PG shares,” reads part of the statement.
According to the provisions of the scheme both local and external creditors have been paid over $9 million.
“In line with the provisions of the scheme of Arrangement, the various classes of creditors and shareholders have been paid.
“Secured creditors have been paid a total of $1 643 746, Preferred creditors were paid $1 183 803.
“For payment purposes concurrent creditors have been classified into foreign concurrent creditors and local concurrent creditors. Local concurrent creditors were paid $2 731 472 while $177 648 was paid to foreign concurrent creditors,” said management in a statement released this week.
The firm has also set aside $3 765 659 to pay statutory obligations.
Dewei Investments has since committed to inject fresh working capital and funds required for retooling the company.
Prior to the Second Scheme of arrangement, which was sanctioned by the High Court in July 2016, PG Industries had been under an initial High Court-sanctioned Scheme of Arrangement since April 2015 aimed at protecting its assets while it sought to restructure its debts.
But despite initial plans to start making quarterly payments to unsecured creditors in October 2015, the company announced during the same month that it was unable to make the payments to concurrent creditors due to cash flow constraints, and was in negotiations with a “prospective investor” (which turned out to be Dewei Investments) for re-capitalisation.
PG Industries’ shares were suspended from trading on the Zimbabwe Stock Exchange (ZSE) in 2013.
