adminBusiness Reporter
MEIKLES Limited shareholders carried all resolutions regarding an employee share scheme yesterday, but pre-conditions attached to its implementation have raised doubts on the firm’s commitment to indigenisation. After an extraordinary general meeting of the conglomerate, Meikles Limited chairman Mr John Moxon said the company would now move to implement the resolutions provided its money at the Reserve Bank of Zimbabwe is reimbursed.
But he said this would only happen after the RBZ has paid Meikles Limited funds it took from its account after its initial public offering in 1996.
Mr Moxon said the IPO raised a total of US$63 million with some of the funds having been invested while the balance remained at the central bank.
“When we get the money at the Reserve Bank we will implement all these resolutions. They (RBZ) are working on a repayment plan, but we do not know what it is,” Mr Moxon said.
He said the funds were Meikles’ single biggest asset at the central bank since 1998.
What was initially a US$40,6 million deposit has reportedly accrued US$26 million interest, raising the amount owing to US$66,6 million.
It is these funds that are meant to enable the company’s employee share ownership trust to finance the purchase of 28 million shares towards fulfilment of indigenisation compliance.
The Ministry of Youth Development, Indigenisation and Empowerment have approved the company’s provisional indigenisation plan on the condition that 10 percent of the issued capital be issued to the trust.
Foreign-owned companies are required in terms of the country’s indigenisation and economic empowerment law to sell at least 51 percent stake to indigenous black investors. But considering the RBZ’s dire financial situation, it is anybody’s guess when exactly the funds would be paid as to plan around their recovery purposes of the firm’s immediate strategic plans.
And it is not clear whether Government provisionally endorsed the indigenisation plan for compliance through the sale of 10 percent stake to workers that would be paid for from funds whose payment date is not certain.
The RBZ is saddled with a US$1,1 billion including funds taken from foreign currency accounts of various companies, at the height of the country’s economic crisis to fund national obligations.
The apex bank has not been able to pay even after selling some of its assets.
Nonetheless, Meikles shareholders approved that 4 000 000 unissued shares of the company be placed under the control of the directors who shall issue the shares to the Meikles Limited employee share ownership trust.
These will be issued on such terms and conditions as directors deem fit, provided the shares are issued at a price calculated on the basis of the weighted average price of shares over the 30 days prior to the date of issue.
Approval was also granted for direct financial assistance in the form of loan funding to the Meikles Limited employee share ownership trust to enable it to finance the subscription of up to 28 000 000 shares in the company (of which 8 418 510 shares have been issued).
The shares will be purchased at a subscription price calculated on the basis of the weighted average of Meikles Limited shares over 30 days prior to the issue with the company providing such direct financial assistance in the form of loan funding when the funds on deposit with the Reserve Bank are paid.
Shareholder permission was also granted for the company to provide direct financial assistance in the form of loan funding to the share purchase scheme of 2011 to enable the scheme’s participants’ shareholding company to finance the purchase of 11 187 619 shares in the company from the open market.
The shares are to be bought at market prices, subject to the loan funding being availed when the money at the RBZ is secured.
Online Reporter