Tanganda holds key on Meikles property portfolio
TINASHE MAKICHI
The completion of the unbundling of Tanganda by Zimbabwe Stock Exchange-listed Meikles Limited will inform the future strategy around unlocking value in the diversified group’s property portfolio, Business Times can report.
Currently, Meikles Limited has been face-lifting its Central Business District (CBD) 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 is yet to be determined and will be informed after the demerger of Tanganda has been concluded.
“The group has a large portfolio of properties. Strategic alternatives are being examined on how best to unbundle properties and to provide an opportunity for shareholders to enhance value. A strategy will be determined and implemented after the Tanganda unbundling process,” Meikles Limited chairman John Moxon (pictured) said.
He added the strategy around the group’s hospitality assets is also yet to be determined.
“The status of the Hospitality assets is yet to be decided, but a strategy to unlock and enhance shareholder value will be determined. It is envisaged that Meikles Limited will focus on the retention of its investment in retail, primarily supermarkets,” Moxon said.
He said there has been a historic view that a grouping of related entities into a conglomerate structure is most suitable for shareholders in terms of value creation.
However, there is a growing opinion that an entity should be an independent business with its own focused identity and will then be well placed to unlock shareholder value, Moxon said.
Meikles Limited provided additional 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, Moxon said. Subject to shareholders approval, Tanganda is to be unbundled and is to be separately listed.
The strategy is expected to unlock the value of the capital invested in crop diversification for the shareholders.
In the outlook, Moxon said the consumer staples concern will continue operating with a risk adjusted strategy as Covid-19 circumstances affect sectors of the group’s business activities.
