TINASHE MAKICHI
Meikles Limited is engaging the Zimbabwe Revenue Authority (Zimra) for tax relief to facilitate its proposed demerger of Tanganda and the listing of the agricultural concern on the local bourse, Business Times can report.
The granting of the tax relief is a condition precedent for the transaction to sail through.
Meikles Limited recently announced the deferment of the listing of Tanganda on the Zimbabwe Stock Exchange (ZSE) as it pursues talks with Zimra. Tanganda was supposed to list on ZSE on December 9.
“Meikles has sought the Zimra’s approval for Capital Gains Tax Relief as provided in terms of Section 15 (1) (b) of the Capital Gains Tax Act (Chapter 23:01). This approval has not yet been granted,” Meikles Limited company secretary Thabani Mpofu said.
“Meikles is engaging Zimra on the matter which is a condition precedent according to the proposed demerger of Tanganda by way of a dividend in specie to Meikles’ shareholders and subsequent listing of Tanganda.”
He said the deferment of the listing only affects the implementation and listing dates which will be announced when the tax relief has been granted.
The group which owns various business portfolios in agriculture, hospitality, retail and security has already announced that the unbundling of Tanganda will be the first of many spin-offs as it wants to narrow its focus on the retail business.
Tanganda has vast tea estates in the eastern parts of the country and has been diversifying its focus over the past few years into export earning macadamia nuts, avocado production and solar energy generation.
The completion of the unbundling of Tanganda set to inform Meikles Limited’s future strategy around unlocking value in the diversified group’s property portfolio.
Currently, Meikles Limited has been face-lifting its central business district properties for letting out to various operators.
The diversified group has also since discontinued operations of its department stores which included Greatermans, Barbours and Meikles.
Part of the buildings which used to house these operations are the ones targeted for renovations and eventual letting out.
In a 2021 annual report, Meikles Limited noted that the strategy to unlock value in its property portfolio was yet to be determined and would be informed by the conclusion on Tanganda unbundling process.
Meikles Limited has been instrumental in providing capital to Tanganda since 2011 to support the crop diversification thrust and this capital being additional to Tanganda’s normal annual capital expenditure.
As at March 31 2021, Meikles cumulatively injected US$20.8m for macadamia nuts and avocados plantations development, an avocado processing facility and recently for solar power plants. Further capital has been provided subsequent to the year-end.
Tanganda is now in a strong financial position and well set to independently sustain its operations going forward.
The strategy is expected to unlock the value of the capital invested in crop diversification for the shareholders.
