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Meikles empowerment deal approved

27/11/2013 00:00:00
by The Source
 
Majority shareholder ... John Moxon
 
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MEIKLES Limited shareholders approved the transfer of a 10 percent stake to employees at an extraordinary general meeting on Wednesday, with the transaction being funded by cash the hotel and retail group is owed by the central bank.

The shareholders agreed that the Employees Share Ownership Trust would get 28 million shares under an indigenisation plan already approved by the government.

In 2011, shareholders approved the issuance of 24 million shares to the employees trust, constituting 8.91 percent of the issued share capital, and on Wednesday, approved issuance of a further four million shares.

Some of Meikles’ shareholders are foreign while the Moxon family holds the majority of shares, 47.42 percent, through its offshore investment vehicle Gondor Capital, necessitating the company’s compliance with Zimbabwe’s indigenisation laws which require foreign firms to transfer 51 percent stake to local blacks.

One of the resolutions passed said the company would provide a loan to the employees trust to enable it to finance the subscription of up to the 28 million shares in the company of which 8 418510 shares had already been issued.

Meikles is owed $76, 5 million by the central bank which was seized from the group’s Foreign Currency Account over a decade ago and used mainly for quasi-fiscal activities.

“At the moment a plan is being put in place by government so that we can access and use part of the funds (to finance the indigenisation exercise),” Meikles chairman, John Moxon told shareholders.

Speaking to journalists after the EGM, Moxon said he had no details of the government’s repayment plan. In August, Moxon said the company had received $26 million in interest accrual from the principal debt which will be reflected in the financial results at the end of September.

“We have authorised the numbers of shares to be issued to the employees share ownership trust but we rely on receiving our deposit from RBZ, of which government is working on a repayment plan,” he told journalists.

On the operations of the company, he said the country was in a “difficult situation” and this was impacting negatively on the operations of Meikles.

“The first three months of our financial year were fine but progressively more difficult,” he said, citing cash shortages among the challenges facing the group.



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