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Business Reporter

ONE of Zimbabwe’s leading brick makers, Willdale Limited, says it has commenced negotiations for the disposal of certain idle assets to raise funding for capital expenditure programmes.

Willdale, listed on the Zimbabwe Stock Exchange (ZSE) is engaged in making and selling clay bricks and the Company’s products include common bricks, face bricks, semi-faced bricks, and paving bricks.

In 2017, the company disposed of part of its land for US$11 million, with the proceeds utilised towards servicing debt and settling preference shares obligations.

The 190,1 hectares of idle land formed part of Swanwick of Teneriffe of Kinavarra and the land is located in Mount Hampden adjacent to the land currently being utilised by the Company.

In a statement yesterday, Willdale advised its shareholders that it was negotiating for the disposal of certain idle assets.

“The transaction, if the transaction is successful, will raise funds for capital expenditure and could have a material effect on the business and share-price,” the company said.

Over the years, Willdale has been focusing on the production side, buying new equipment and upgrading laboratories.

But the US$11 million that was released from the sale of land was utilised towards servicing debt and settling preference shares obligations.

Willdale’s exposure during that time included a US$2,68 million interest bearing bank loan and overdraft owed to CBZ Bank Limited. The loan had been accruing interest of 10 percent per annum.

The other obligation was the US$863 283 accumulated but unpaid Preference Share dividend. The dividend had been accumulating since 2014 when the preference shares were issued but the company did not have capacity to meet the semi-annual preference dividend obligations.

Priority three of the obligations was US$3,25 million redemption of Preference shares.

The company issued 10 percent redeemable cumulative Preference Shares in 2014 through a rights issue to shareholders.  The shares were redeemable from last year to year five and subject to agreement with the holders of the preference shares.

The company has since paid off the preference shares and delisted them from the Zimbabwe Stock Exchange (ZSE).

Willdale in its financials for six months to March 31, 2022, said demand for bricks was relatively high, largely driven by demand from housing projects.

Mr Cleophas Makoni, the company’s chairman said despite a steady demand, shortages of the fast moving plaster range caused by the extended rains affected the order fulfilment rate.

During the period under review, revenue was up 4 percent compared to the same period prior year driven by a better average price from a better product mix.

Operating profit margin declined to 21 percent compared to 50 percent in the prior year due to cost pressures.