Harare — IN what has been hailed as one of the biggest empowerment deals that this country has seen in recent years, management and workers at Schweppes Zimbabwe Limited have taken over the running of the company with the blessing of the Government from its previous owners the Coca-Cola Company. In this interview, managing director Mr Charles Msipa discusses the details of the deal with Herald Business Deputy Editor Fanuel Kangondo .

Schweppes management and staff recently acquired a controlling interest in SZL in partnership with Delta, what are the terms of the transaction?

The companies in question are Schweppes Zimbabwe Limited ("SZL") and Schweppes Exports Pvt Limited ("SEL") which hitherto were 100 percent owned by The Coca-Cola Company (TCCC).

The terms of the transaction are that Delta acquired 49 percent and Whaterton Investments 51 percent of both companies.

Whaterton Investments is an indigenous consortium jointly owned by management and employees. Management own 40 percent of Whaterton through their investment vehicle Beverage Partners Zimbabwe (Pvt) Limited, and employees 60 percent through an employee share trust, Schweppes Zimbabwe Employee Share Ownership Trust.

What does this mean for the Schweppes employees and how many are involved?

A total of 365 permanent employees are set to benefit through this transaction.

As shareholders (direct or indirect), employees may gain a better understanding of the financial performance of the company

Trust shares give employees a stake in the future growth of the company and they benefit from the success they have created

Employees will benefit in future income in the form of dividends

Share ownership by employees is expected to deliver improved business performance

Trust shares can encourage a greater level employee involvement and participation in the business

Will this signal any changes in the operations of the company in Zimbabwe?

The change in ownership will not affect the operations of the business in Zimbabwe.

In such a transaction there are obviously some regulatory issues that had to be addressed. How have you handled them?

The transaction required the approval of the Competition and Tariffs Commission (CTC), Ministry of Youth Development, Indigenisation and Economic Empowerment and Exchange Control Division of the Reserve Bank.

CTC approved the transaction subject to both Delta and Schweppes committing to a competition compliance programme. A protocol to that effect has been submitted for approval by CTC.

The Ministry of Indigenisation approved the transaction after being satisfied that it was in compliance with the Indigenisation and Economic Empowerment Act.

The Exchange Control Division of the Reserve Bank approved the transaction.

Your partner, Delta Corp, is in the beverages business, would this not create problems with CTC?

A commitment was made by the joint venture partners (Delta and Whaterton) to CTC that there will be continuity of Schweppes brands in Zimbabwe.

The competition compliance programme alluded to above is basically designed to promote and enhance the conditions for effective competition in the beverage sector in spite of the joint venture between Delta and Schweppes.

The strategic partnership with Delta will immensely benefit the Schweppes business given Delta's experience in beverage manufacturing and expansive distribution network.

What is the your relationship with TCCC and what will be the relationship post (empowerment) localisation?

The Coca-Cola Company (TCCC) will continue to own its trademarks.

Schweppes Zim is licensed by TCCC to use the trademarks to bottle and distribute the beverages.

Through this transaction, Whaterton will own 51 percent and Delta 49 percent of the bottling business and NOT trademarks.

TCCC will also continue to govern its relationship with SZL/SEL through a Bottlers' Agreement.

Under the Bottlers' Agreement, SZL/SEL is obligated to promote, develop and fully satisfy demand for Mazoe, Schweppes Water, and Ripe 'N Ready within Zimbabwe.

Are there going to be any management structural changes at Schweppes?

There will no management changes save to mention that a new board appointed by the shareholders will be announced soon.

Is the transaction compliant with indigenisation laws?

In all material respects, the transaction is in full compliance with the Indigenisation Act and regulations since 51 percent shareholding is in the hands of management and employees who are all indigenous.

What about the pending litigation with Mutumwa Mawere?

This is a matter that is before the courts as you have rightly pointed out and it is inappropriate to comment on that at the moment.