Online Reporter
Nelson Gahadza
Zimpapers Business Hub
Cement manufacturer, PPC Zimbabwe (PPCZ), has reached an agreement to sell a vacant immovable property known as Arlington Estate, in Harare, for US$30 million.
PPCZ’s South Africa-based parent company, PPC Limited, said in a statement that the buyer was a property development firm with project execution expertise and not a related party.
Explaining the rationale for the disposal and use of proceeds, PPC Limited said its local unit acquired Arlington Estate in 1990, and the property is zoned for residential, industrial and commercial activities.
PPCZ formally received the title deed to the Arlington Estate, comprising some 418 hectares of land from the Government, in December 2024, following negotiations that ensued the compulsory acquisition of the property by the State.
“The Arlington property does not contain any limestone deposits, and PPCZ has no commercial use for the Arlington Estate in its core cement-producing business.”
Consequently, PPCZ made a decision to dispose of the Arlington property at fair value.
PPC Limited said the transaction will be settled in United States dollars, and the decision on how to use the money will be considered by PPC Limited in terms of its capital allocation model and its optimal gearing levels.
The disposal will be implemented on the date of registration of the transfer of the Arlington Estate, from which date all legal risk in and all benefits attaching thereto will pass to the purchaser against payment of the disposal consideration.
PPC Limited said there were no conditions precedent to the disposal; however, several milestone events needed to be met within defined timeframes, failing which the disposal agreement shall automatically lapse.
The milestone events include PPCZ obtaining approval from the Reserve Bank of Zimbabwe, declaring a special dividend, in the amount of the proceeds of the disposal, to its shareholders and repatriating the amount due to PPC in South Africa.
The purchaser pays the full disposal consideration plus value-added tax (VAT) to the property conveyancer appointed by PPCZ.
PPCZ and the purchaser have also entered a further agreement in terms of which the purchaser will buy from the company all its cement requirements for any developments or infrastructure on the Arlington property exclusively from PPCZ.
“This agreement will become effective on the effective date of the disposal,” reads part of the statement.
Online Reporter