OK Zimbabwe Weighs Further Property Sales as Liquidity Crisis Deepens

OK Zimbabwe is considering selling an additional US$17,2 million in properties as liquidity pressures intensify, with weak sales, stock shortages and mounting losses threatening the retailer’s recovery (image source)

Retail giant OK Zimbabwe Limited is considering selling an additional US$17,2 million worth of properties, on top of the US$10,5 million already earmarked for disposal, as it battles deepening liquidity constraints and acute working capital shortages.

The financial strain has translated into persistent stock shortages across key product categories, as tight supplier trading terms continue to limit inventory replenishment. While ongoing engagements with suppliers have allowed a partial resumption of deliveries, stock levels remain significantly below optimal requirements. This is despite suppliers having received 50% of legacy debts through OK’s US$20 million capital raise completed earlier this year.

Operational disruptions over the past two years have pushed the group’s total debt burden above US$30 million, prompting management to initiate an asset disposal programme first announced in July. Under the plan, seven freehold properties valued at US$10,5 million were identified for sale. However, progress has been slower than anticipated. “Property valued at US$10,5 million has been identified for disposal, and as at the end of September 2025, offers worth US$7,3 million were under management consideration,” the company said in a statement accompanying its half-year results to September 30, 2025. OK added that all prospective buyers were prepared to enter long-term sale-and-leaseback agreements.

The retailer disclosed that it owns additional properties valued at US$17,2 million, which could also be disposed of, subject to board approval, should liquidity pressures persist. Proceeds would be directed towards funding working capital requirements. In the interim, OK has increasingly relied on supplier-finance arrangements, under which third-party financiers settle supplier invoices when OK misses payment deadlines, effectively transferring the debt to financiers. The group has also secured new banking support.

“US$19,6 million in banking facilities have been secured, with US$12,3 million still undrawn,” the company said. “Four key relationship banks have provided formal letters of support, reinforcing confidence in continued financial backing.” Despite this, financial performance remains under severe pressure. Revenue for the half-year period plunged 84,07% to US$28,26 million, from US$177,43 million in the prior comparative period.

Board chairperson Herbert Nkala attributed the collapse to an 82,68% decline in sales volumes, driven by inventory shortages, supplier disruptions and store closures under the group’s rationalisation programme. The company posted a net loss of US$17,81 million, compared to a profit of US$3,71 million in the same period last year. Although operating costs were reduced, expenses remained high relative to depressed sales. Employee benefits amounted to US$9,51 million, while other operating costs reached US$11,76 million. Utilities and backup power costs of US$5,3 million further weighed on margins amid persistent electricity outages.

As at the end of September, OK remained technically insolvent, holding just 47 US cents for every dollar of short-term debt. Nkala said management’s immediate priority is stabilisation. “Key constraints to recovery remain liquidity for product procurement, limited stock availability and delays in property disposals,” he said, adding that unlocking proceeds from asset sales remains central to restoring the group’s viability.