Willdale converts land banks to raise capital

Listed brick making firm, Willdale Limited is converting its land banks into residential developments as part of a capital raise for acquisition of machinery to enhance production at its brick manufacturing plants.

Willdale disclosed to shareholders in a circular that company owned roughly 165,6 hectares on Mount Hampden, an area that is rapidly growing due to the neighboring new city and the new Parliament Building. Mr. Cleophas Makoni, the chairman, claims that this gives the business justification to enter the residential development market in order to capitalize on the area's growing demand. This has made it possible to develop the area into stands for residential, business, and industrial use.However, the business has more than that. "In addition, the organization possesses surplus undeveloped land in Christmas Gift, Gweru, which spans roughly 12.6 hectares, thereby increasing the overall land area accessible for development to roughly 178,2 hectares," Mr. Makoni stated.

Mr. Makoni claims that the development's earnings will go toward buying a new facility, which will raise the caliber of the company's bricks and increase its ability to successfully compete both locally and regionally. The land banks are currently worth a combined US$2,95 million; developing them will greatly raise that amount and add to the equipment needed. "The company's current manufacturing facility can only produce bricks on a seasonal basis; full-scale production takes place between March and November. The facility is closed for up to three months every year, from December to February, due to the requirement for natural sunlight to dry bricks before they are fired.

"This essentially indicates that there is room for the business to maximize its output by reducing the downtime caused by the aforementioned seasonality," Mr. Makoni stated. Willdale has also emphasized the availability of technology that makes it possible to produce bricks year-round. This technology includes the utilization of kilns, rotary dryers, and tunnels.

Willdale plans to hold an extra-ordinary general meeting on April 4, 2024, to seek shareholder approval for the land developments. The company sold off a portion of its land for US$11 million in 2017, using the proceeds to pay off debt and settle preference share obligations. "The company intends to acquire and install a plant with a rotary kiln and dryer to enhance its production capacity," he stated.

"Therefore, in order to grant the directors the power to implement the development agreements with the contractors and to enable the directors to enter into comparable development agreements for the other identified idle land gifts for Christmas, shareholder approval is sought,” Mr. Makoni stated. With Zusammen (Private) Limited and Melrose Construction (Private) Limited, doing business as Integrated Construction, the company has entered into two development agreements in accordance with the proposal for the development of the land into commercial and industrial stands and the eventual disposal of the developed stands.