admin
Mentor Holdings.
The disposal had been stalled after challenges were encountered in getting regulatory approvals from the Zimbabwe Stock Exchange and the central bank.
“All necessary approvals have been received for the exchange of the group’s investment in Cape Grace Hotel for equity in Mentor Holdings,” said Meikles.
Meikles said Mentor Holdings was a significant private equity group that is being established to invest in African economies and other emerging markets.
The Herald Business understands that the US$22,5 million transferred to South Africa “for investment” will not find its way back to Zimbabwe.
Sources said the funds would be used in Mentor’s excursions in search for investment opportunities although the transfer of the funds was deemed externalisation by an earlier Meikles management.
For the purpose of the transaction the value of Cape Grace was put at US$30 million. Cape Grace was Meikles’ only profitable subsidiary in the half year to June 2010.
The Gape Grace Hotel was listed under the “disposal group” last year after Mentor Holdings said that it wanted to exercise the option agreement to buy the Zimbabwean group’s interests in the hotel.
The operation had been maintained as non-current asset classified as held for sale.
The hotel was earmarked for disposal back in 2008 after an option agreement was signed between Meikles Limited and Cape Grace Hotel Limited, a wholly owned subsidiary of the group incorporated in the British Virgin Islands.
In August 2008, “long form agreements” were signed between parties to the deal, but were allegedly unilaterally signed by the then former chairman Mr John Moxon without the knowledge and consent of other board members, whose approval he sought latter.
Mr Moxon had allegedly signed the agreements without board approval as he allegedly felt there had been a breakdown of trust between the Meikles Limited management and Mentor Holdings.
He later sought board approval fearing Mentor could sue if the board did not ratify the agreements to make the sale agreement fully binding.
The board had declined to ratify the agreement, for it to take effect, on concerns that no independent evaluation of Cape Grace Hotel had been carried out in line with regulatory requirements.
There had been disagreements between directors, during the reign of Mr Nigel Chanakira as chief executive, and shareholders in Meikles regarding the disposal of Cape Grace Hotel.
The sale of Cape Grace was characterised by claims of irregularity and disregard for corporate governance structures by Mr Moxon.
Some of the directors also claimed irregularities in the manner 26 percent of Cape Grace was given to a trustee and the way US$22,5 million was transferred to South Africa, allegedly for investment.
Online Reporter