Staff Writer
Meikles Limited shareholders have overwhelmingly approved the acquisition of the iconic Meikles Hotel by Dubai billionaire, Ali Albwardy, through one of his investment vehicles in a deal worth US$20 million.
More than 70% of shareholders of Meikles Limited backed the resolution relating to the sale of Meikles Hotel to Albwardy Investments, a Dubai-based entity, at an extraordinary general meeting (EGM) held in the capital on Friday.
The Dubai-based firm was founded by Albwardy in 1976, who is the chairman of the enterprise.
The acquisition of the Zimbabwe Stock Exchange (ZSE) listed conglomerate Meikles Limited’s flagship hotel is expected to trigger a return of value to Meikles Limited shareholders.
Meikles Limited also have a secondary listing on the London Stock Exchange.
The current owner of the hotel, Meikles Limited, has over the past few years battled low occupancy levels and foreign currency shortages to refurbish the property. Now, it is expected that Albwardy, will spend at most US$30 million in upgrading the hotel,which has 312 rooms.
The deal, which has since received regulatory approvals from the ZSE and the Competition and Tariff Commission, now awaits the Reserve Bank of Zimbabwe (RBZ) approval for Meikles to dispose of Meikles hotel, which was established in 1915,to foreign shareholders.
“…What is outstanding now is the confirmation from the regulatory authority for us to carry out the disposal to foreign shareholders,” Thabani Mpofu, the Meikles Limited company secretary said at the company’s EGM.
He added: “We now have to submit to the Reserve Bank of Zimbabwe (RBZ) for confirmation of the approval.”
Meikles Limited, which started operating in Zimbabwe, then Rhodesia in 1892, has interests in the retail business through the TM-Pick’n Pay supermarket chain, a tea-manufacturing entity, Tanganda Tea Company and also runs hotel businesses, the Meikles Hotel, the Victoria Falls Hotel in the resort town of Victoria Falls in a joint venture arrangement with African Sun Limited, among others.
Meikles also owns a mining unit called Meikles Centar Mining.
It therefore appears to fit perfectly into Albward’s strategy for Albwardy Investments, which is also involved in the hospitality, food, trade, insurance and lifestyle business, among others.
The EGM was not short of controversy after minority shareholder Clifford Mutemhi blasted the current company’s board on their continued failure to make sound decisions to drive the company forward.
“There are a number of decisions where the board has failed the shareholders. We talk about the Cape Grace. It’s a failed decision and we talk about the complete sale of Meikles Hotel is a failed decision as well,”said Mutemhi.
Mutemhi also questioned the continued disagreements on how much the diversified group is owed by government.
Although, the EGM was subject to a heated exchange of arguments by shareholders, the sale of Meikles Hotel prevailed.
The sale of Meikles Hotel is set to strengthen Meikles’ balance sheet as this will allow the Group to unlock considerable value to all of Meikles’ shareholders while also leading to the transformation of the Meikles Hotel, under the ultimate ownership of Albwardy Investment, into a leading regional hotel.
Meikles will also seek to generate further value in its remaining assets through the re-investment of the proceeds from the transaction in the agriculture and hospitality segments of the Group’s other businesses.
