27 January 2013

Zimbabwe: Art Corporation Courts Investors

ZIMBABWE Stock Exchange-listed concern, ART Corporation, is engaged in negotiations with potential investors to inject US$2 million into the business amid indications the process may be complete by the end of February.

Last year, ART Corporation chief executive officer, Richard Zirobwa said the company was projecting revenue of US$40 million, a 17% increase from the previous financial year.

The group's core business is centred on paper manufacturing, stationery, plantations, tissue converting and battery sales, primarily its cash cow.

Zirobwa remained mum on the possible transaction and said the board was still running with the cautionary statement issued.

"The due diligence process from the possible partners is progress. It is therefore not possible for me to make any comments until this process is over. We are targeting end of February as date for the completion of this exercise," he said, adding that any comments would not be well-timed.

Group secretary Fra-nklin Mukarakate wrote in a notice to shareholders last week that the company was still engaged in discussions which, if successfully completed, would have a material impact on the business and share price.

"Accordingly, shareholders are advised to exercise caution in trading the company's shareholders and should consult their professional advisors before dealing in their shares until such a time the results of the negotiation are known," the cautionary read.

The company's share price fell by 17% on the local bourse as of Wednesday last week.

The group is planning on injecting new capital to retire costly debt and aims to restructure borrowings this year.

Long-term borrowings currently stood at US$2,6 million as at last year.

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