PG Industries takeover gets regulatory approvals

Published: 03 October 2017

Indian firm Dewei Investments PG Industries take-over is set to be completed this month after the deal received the requisite regulatory approvals.

Dewei Investments last year entered into an agreement with PG Industries to take over the entire issued share capital of the struggling construction materials firm for $500 000 after shareholders approved 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. PG has now announced that the Secondary Scheme of Arrangement has received the necessary approvals.

"Scheme members are advised that Dewei Investments Limited has now received the necessary regulatory approvals including Exchange Control and Indigenisation.

"Dewei is now proceeding to conclude the transaction. It is anticipated that settlement to scheme members will be made in October 2017," said PG Industries company secretary Kudakwashe Waniwa in an update.

The approval in respect of the Exchange Control Authority is in line with the dictates of the Exchange Control Regulations of the Reserve Bank of Zimbabwe, for the investor to pay off non-resident shareholders' and settle all obligations to non-resident creditors in terms of the scheme, under the transaction.

Dewei also committed to provide new working capital and funds required for retooling the company. The second scheme of arrangement was sanctioned by the High Court in July last year.

Prior to that PG Industries had been under an initial High Court sanctioned scheme of arrangement since April 2015 aimed at protecting its assets while it restructures 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.
- BH24

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