8 March 2016

Zimbabwe: Meikles Africa Upbeat After Debt Deal

MEIKLES Africa Limited said yesterday government had agreed to pay a US$90 million debt owed to the conglomerate by the Reserve Bank of Zimbabwe (RBZ) through the RBZ Debt Assumption Act.

In a shareholder update, Meikles said it was happy with the final agreement and urged other companies, investors and the international community to be "encouraged" by the "progressive" agreement.

"Shareholders are advised that a basis on which funds are to be recovered has been agreed," the Meikles board said in a dispatch to shareholders, which included a trading update for the nine months ended December 31, 2015.

Meikles' full year ended on March 31.

"The government has undertaken to repay the outstanding funds in terms of the RBZ Debt Assumption Act of July 2015. Negotiators in both government and the company are to be commended on the conclusion of the agreement. The local business community should be encouraged by such a progressive interaction between government and a participant in the private sector. The international community and investors may well be advised to take note of this positive development," Meikles said in the shareholder update.

It said following the agreement, Meikles would now be able to move ahead and implement a number of projects.

In the trading update for the nine months to December 31, 2015, the board said the group had registered a 12 increase in turnover to US$347 million, compared to US$310 million the previous comparable period.

"Overall margins, together with operating income margins at 21,6 percent, were marginally better than those of the previous period of 21,2 percent," the statement said.

"The sales mix in the group as a whole does distort this comparison, as margins do vary over group activities. The financial impact of the agreement with government will be included in our audited results for the full year to 31 March, 2016," the statement added.

The Zimbabwe Stock Exchange-listed Meikles' interests span from retailing to the hospitality industry and tea production.

It owns one of only two five star hotels in Zimbabwe-the Meikles Hotel.


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