ZIMPLOW'S rights offer, to raise US$11,2 million for the acquisition of a 57,2 percent stake in agriculture implements manufacturer Tractive Power Holdings, opened yesterday.
The cash call is scheduled to close on July 27 2012 while the results of the rights issue would be announced on August 8.
Shareholders approved the cash-raising initiative at an extraordinary general meeting on June 29.
They also voted in favour of proposals to increase authorised share capital from 500 to 800 million and placement of unissued shares under the control of directors of the company.
Zimplow seeks to raise US$11,2 million by issuing 224 185 085 ordinary shares with a nominal value of US$0,0001 each at a rights offer subscription price of US$0,05 per share.
The new ordinary shares would be issued in the ratio of two ordinary shares for every three ordinary shares already held in the company.
About US$9,7 million would be used to acquire the Tractive Power stake, while the balance of the proceeds (US$1,5 million) would be used to cover expenses of the rights offer.
Zimplow directors said the rationale behind the acquisition of TPH was to explore more opportunities in tractor-drawn farm equipment.
Already, Zimplow holds a 100 percent stake in Mealie Brand, CT Bolts, Tassburg and has a 49 percent stake in Afritrac.
"The board also sees significant potential for your company to consolidate its position within this sector. Zimplow exposure to TPHL will therefore offer an avenue for product and market diversification in agriculture and mining sectors," the directors said in a statement released last month.