RBZ finally pays Meikles debt

By Ndakaziva Majaka

HARARE – Reserve Bank of Zimbabwe (RBZ) has begun payments of a 16-year-old debt to diversified conglomerate, Meikles Holdings Limited (Meikles).

John Moxon, the Meikles chairman said the group was in receipt of Treasury Bills of $49,6 million in funds of deposit from the central bank as part of repayment of the debt which has since ballooned to $90,8 million.

Moxon noted that the group has “been advised by relevant authorities that upon completion of the required process, Treasury Bills of similar terms to those in their position will be issued for the balance”.

The group is owed $87,2 million by the Reserve Bank of Zimbabwe (RBZ), which has increased to $90,8 million as a result of interest negotiations.

The debt, which has been growing since 1998 when it originated, has accrued interest since the economy was formally dollarised in February 2009.

It originated from deposits made to RBZ following Meikles listing on both the local bourse and the London Stock Exchange in 1996 and the raising of funds from a number of substantial investors for the benefit of the company.

Moxon said there has been interaction with local financial institutions outside of banks to liquidate the Treasury Bills.

“The company has been testing its ability to market the bills in the local market. Efforts to date have focused largely on local banks. Some significant success has materialised from these efforts,” he said.

“These institutions are likely to have longer investment time frame capacity than banks. The interaction is progressing and subject to some revision of the terms of the Treasury Bills, success looks possible,” the Meikles chairman said.

Moxon also revealed the company was approached by a foreign corporate which advised that foreign institutions may have an appetite for the Bills.

“Discussions with the authorities continue on an amicable basis with a view to ensuring that the Treasury Bills are on terms that will be accepted in the market.

“Developments suggest satisfactory progress on this initiative, which is expected to be concluded shortly,” he said.

Meanwhile, in the financial year ended March 31, 2014, Meikles revenue was 1,8 percent lower than the prior year attributed to poor performance of the group’s retail and agricultural subsidiaries.

Operating costs were 1,7 percent ahead of those incurred in the prior year, finance costs also increased.

Borrowings increased to fund the group’s expansion and refurbishment in the supermarkets, hotel refurbishments and plantation development.

While non-trading income for the group was $9,7 million in 2013, it shot to $48,8 million for the period under review.

Basic earnings per share rose to 13,56c from 0,75c prior year comparative.

Meanwhile, the group posted a $37 million profit for the period under review, up from $6,5 million recorded prior year comparative. Daily News