Harare – ZSE listed Meikles Africa Limited shareholders are expected to vote in favour of the final disposal of a 10% stake in the company to an employee share ownership trust, which is now set to be provided with financial assistance to purchase the shares.
Meikles has diversified interests in hotels, retailing and agro-processing through Tanganda Tea Estates and other projects growing avocados and macademia. Its joint venture partnership with Pick n Pay has also provided TM Supermarkets with the financial clout to better stand competition against rival operator, OK Zimbabwe.
The group will convene an extraordinary general meeting on November 27 to ratify a resolution to dispose of the 10% shares to a trust made up of the company’s employees.
This is in line with Meikles plan to comply with the empowerment law which requires foreign companies to give majority shares to previously disadvantaged groups in Zimbabwe.
“The Ministry of Youth Development, Indigenisation and Empowerment have approved the Company’s provisional Indigenisation Implementation Plan on the condition that 10% of the issued share capital be issued to the Trust,” said Lone Mitchel, Meikles Africa’s company secretary.
Mitchel said “a further 4,000,000 shares need to be issued to the Trust in addition to the shares already authorised”.
Under this arrangement, a total of 19,581,490 shares will be placed under the control of the directors for them to offer them to the employee ownership trust.
“This total together with the 8,418,510 shares already issued to the Trust will constitute 10% of the Company’s issued share capital,” added Mitchel.
Shareholders are also expected to ratify another resolution to vendor finance the trust’s acquisition of shares. Companies in Zimbabwe are under growing pressure to provide funds for the purchase of shares by black Zimbabwean groups under controversial indigenisation laws which were first promulgated in 2007.
Old Mutual has also agreed to provide vendor financing for a consortium of businessman lead by former chief executive officer, Luke Ngwerume who are set to get 10% shares in the financial services group. Other foreign groups such as Implats have also been forced to vendor finance the purchase of shares ceded under the empowerment legislation.
Mitchel said funds to help the Meikles employee share ownership trust acquire the 10% stake had already been. However, this financial assistance will only be advanced to the trust “when the company’s funds on deposit with the Reserve Bank of Zimbabwe” are paid back.