Meikles to sell stake to employee share trust

By Tawanda Karombo

Shareholders of Meikles Africa, Pick n Pay’s Zimbabwean partner in retailer TM Supermarkets, are expected to vote next month for the final disposal of 10% of the group’s shares to an employee share ownership trust in pursuit of the group’s full compliance with the country’s indigenisation policy. 

Pick n Pay’s foray into the Zimbabwean retail space in partnership with the Zimbabwean Stock Exchange-listed Meikles Africa has upped competition in the sector, with supermarket operators modernising their stores in a bid to keep up with competition.

TM Supermarkets is revamping most of its stores in Zimbabwe, including those in Harare, Gweru and Masvingo. Two more outlets are planned for opening before the end of the current financial year, a development that is expected to further strengthen the group’s retail presence.

The company’s shareholders are convening an extraordinary meeting on November 27 to finalise a resolution to sell about 10% of the company’s authorised shares to an employee share ownership trust.

This is in line with the indigenisation compliance plan which the company said on Monday had been approved by the Indigenisation and Economic Empowerment Ministry.

“The Ministry of Youth Development, Indigenisation and Empowerment have approved the Company’s provisional Indigenisation Implementation Plan on the condition that 10% of the issued share capital be issued to the Trust,” Meikles company secretary Lane Mitchel said yesterday.

To meet this condition, the company said, “a further 4-million shares need to be issued to the trust in addition to the shares already authorised to be issued”.

The November 27 extraordinary general meeting is also expected to pass a resolution to assist the employee share ownership trust with money for the purchase of the shares.

Mr Mitchel said funds to help the trust acquire the shares have already been secured although such assistance “will only be extended when the company’s funds on deposit with the Reserve Bank of Zimbabwe” are repaid.

“Shareholder approval is now being sought for the company to finance the purchase of the balance of both the trust and the scheme’s shares in the Company.”

Earnings in Meikles’ supermarkets division jumped more than 50% to $11.2m during the year ended March while “trading in TM Supermarkets was within expectations for the quarter ended June”, the company said.

Turnover for the quarter grew by 5% compared with the previous corresponding period. Meikles Africa has other diversified interests in agroprocessing, hotelling and department stores. Business Day