"A lot of the ZSE companies are still saddled with huge debts which came at a high cost and because operations have not improved to the optimal levels to enable consistent repayment of both the principal and interest, their overhang and delayed recapitalisations, we estimate that an amount of over $500 million is required to recapitalise listed companies," the ZSe said.
A stock market analyst said some of the firms that needed urgent recapitalisation were AICO Limited which needs $40 million, Rio Zimbabwe Limited ($80 million), Hwange Colliery Company Limited ($100 million), and TA Holdings Limited ($100 million).
"Engaging strategic partners could also be used to recapitalise businesses," the stock broker said. "There has been a lot of foreign interest in the country to date in the consumer, agri-business and food processing sectors for example,"he said.
Stock market analysts say 2012 year could witness forced mergers and acquisitions as businesses battle for survival, especially in the financial and services sector.
"We are also likely to witness increased shareholder activism especially with regards to business restructuring given the lethargic performance by some listed entities," a stock market analyst from Imara Edwards Securities (Private) Limited said.
"To this end, we anticipate increased accountability by both management and Board of Directors with some casualties likely this year in cases of continued under-performance," he said.
Since dollarisation in 2009 ZSE-listed companies have raised equity of about $78,12 million, including a convertible debt of about $21,7 million, the stock broker said.Post published in: Business