Cash starved ZK Advertising on sale
TBW Africa is leading a host of other local and international PR agencies in taking over the cash-strapped ZK Advertising.
By Stephen Ilungole
TBW Africa is leading a host of other local and international PR agencies in taking over the cash-strapped ZK Advertising.
TBW Africa made an unspecified offer after doing due diligence for ZK operations in Uganda, Kenya, Tanzania, DR Congo, Zambia and Nigeria, Anthony Wanyoto, the former managing director, said over the weekend.
Owned by Zadock Koola, a Tanzanian advertising investor, ZK closed shop in Uganda in February after running into a $800,000 debt (about sh2b).
Its property has been moved to the Muyenga-based A1 Outdoor, a sister company.
ZK had operations in 15 African countries, but up to seven of them have run into financial troubles.
“Our biggest challenge was lack of capital to pay employee salaries and the daily operation costs. We wanted a bailout from the owner, but he wasn’t forthcoming. That is why we closed operations to sort out supplier and debtor-related issues,†Wanyoto said.
He also blamed their woes on the 6% withholding tax component. “It affected out working capital. It increased our operations costs because it means we were paying suppliers 100% yet we received only 94%. We were only exempt from July to December 2010,†Wanyoto, explained.
“We have started the recovery process from Uganda Revenue Authority, which is still ongoing.â€
He said if the withholding tax remittances were recovered, it could offset some of the deficit.
“The other opportunity is a bailout from the owner and other investors who want to buy into company,†Wanyoto said. Wanyoto distanced himself from the failure of the company, blaming it on its owner.
“We kept asking for recapitalisation in vain. The red flag started in May 2010, but the bailout was not forthcoming. That is why they (owners) have taken over the debt and moved to the sister company.â€
He said he had several options including at ZK Advertising. “I am available for any opportunity that comes up. I am still passionate about advertising.â€
TBW Africa is leading a host of other local and international PR agencies in taking over the cash-strapped ZK Advertising.
TBW Africa made an unspecified offer after doing due diligence for ZK operations in Uganda, Kenya, Tanzania, DR Congo, Zambia and Nigeria, Anthony Wanyoto, the former managing director, said over the weekend.
Owned by Zadock Koola, a Tanzanian advertising investor, ZK closed shop in Uganda in February after running into a $800,000 debt (about sh2b).
Its property has been moved to the Muyenga-based A1 Outdoor, a sister company.
ZK had operations in 15 African countries, but up to seven of them have run into financial troubles.
“Our biggest challenge was lack of capital to pay employee salaries and the daily operation costs. We wanted a bailout from the owner, but he wasn’t forthcoming. That is why we closed operations to sort out supplier and debtor-related issues,†Wanyoto said.
He also blamed their woes on the 6% withholding tax component. “It affected out working capital. It increased our operations costs because it means we were paying suppliers 100% yet we received only 94%. We were only exempt from July to December 2010,†Wanyoto, explained.
“We have started the recovery process from Uganda Revenue Authority, which is still ongoing.â€
He said if the withholding tax remittances were recovered, it could offset some of the deficit.
“The other opportunity is a bailout from the owner and other investors who want to buy into company,†Wanyoto said. Wanyoto distanced himself from the failure of the company, blaming it on its owner.
“We kept asking for recapitalisation in vain. The red flag started in May 2010, but the bailout was not forthcoming. That is why they (owners) have taken over the debt and moved to the sister company.â€
He said he had several options including at ZK Advertising. “I am available for any opportunity that comes up. I am still passionate about advertising.â€