Powerspeed terminates Innscor Africa takeover negotiations

Powerspeed terminates Innscor Africa takeover negotiations

The company said it will soon issue a cautionary notice to update the market.

Powerspeed Electrical says it has terminated negotiations on a transaction in which Innscor Africa was said to be angling for a 49 percent stake in the company as it sought to broaden its specialised retail units.

Speaking at the company’s Annual General Meeting on Tuesday, Managing Director Hilton Macklin said the company will soon issue an end of cautionary notice to update the market.

“The negotiations for a transaction which we were involved in have been terminated, we hope to publish end of cautionary any time from now,” he said.

Macklin said at the same time the company was involved in discussions for the transaction, it has also been negotiating a $2.5 million debenture which will see the conversion of its short term borrowings to slightly longer term.

“We have negotiated for a redeemable debenture of $2.5 mln for the next 2 and half years which will allow us to convert short term borrowings to long term borrowings,” he said.

Meanwhile, on operations Macklin said though January has always been slow, the company`s performance in the first month of the year was much slower than anticipated. However February had shown improvement.

“The last quarter of December was very strong with throughput looking good but January was slower while February started picking up”, he said.

Macklin said following the roll out of new branches last year, management`s primary concern now was to get value out of the existing branch network.

He said the company has not achieved any major changes in its branch network apart from the revamping of Kelvin Road in Graniteside where the branch was renovated to double the retail space from 1 000 square meters to 2 000 square meters.

“We however have plans to expand floor space in our branches in Victoria Falls and Chinhoyi,” he said.

On the company’s solar energy project in Zimbabwe in which it is in partnership with a Swiss clean energy firm, Meeco Group, Macklin said the plans have been put on hold as improved power supply by ZESA has reduced demand for solar energy.

“Current demand for solar does not justify the investments so we are shelving the project at least for now but we will always resume when demand increases,” he said.

Commenting on the Conformity Based Assessment Programme which is set to commence in March, Macklin said he foresees serious chaos at the borders on account of the new Government import restrictions.

He said that the regulation will likely promote the smuggling of goods and might be of no value to the economy as it can lead to subdued corporate profitability and therefore lower tax revenues to the Government.

Macklin however said Powerspeed is ready for the exercise as it has been working with Bureau Veritas on the processes.

Directors and Audit fees were approved at $42 000 and $61 925 respectively.FinX
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