THE Reserve Bank of Zimbabwe (RBZ) has agreed to release $89 million to Meikles Limited in the form of short-term negotiable instruments to extinguish the over 10-year old debt, the company said yesterday.
BUSINESS REPORTER
The debt originated following Meikles listing on both the local bourse and the London Stock Exchange in 1996 and the raising of funds from a number of investors for the benefit of the company.
In a notice to shareholders, Meikles said the money would be released in the form of Treasury Bills.
“The Reserve Bank of Zimbabwe and the ministry of Finance are presently completing the administrative processes to facilitate the tenure and yield of these Treasury Bills. Once this process is in place, shareholders will be provided with full details,” Meikles said.
The move comes after the listed conglomerate announced last week that it would inject $4 million of the money from RBZ into its retail division, a move that would return it to profitability in the second half of the financial year.
The retail division consists of Meikles Store, Barbours and Meikles Mega Mark.
In the 2014 annual report, Meikles said it had received Treasury Bills worth $49,6 million and have been advised by the relevant authorities that upon completion of their required processes, Treasury Bills of similar terms to those already in our possession will be issued for the balance.
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Meikles said local banks had shown appetite in the TBs.
It said there had been positive interaction with local financial institutions that were likely to have a longer investment time frame capacity than banks.
“This interaction is progressing and subject to some revision of the terms of the Treasury Bills, success looks possible. The company has very recently been approached by a foreign corporate who has expressed the opinion that foreign institutions may have an appetite for the Treasury Bills. This approach is also to be progressed. It is too soon to assess the merits of this possibility,” Meikles said.
Meikles said yesterday the “Treasury Bills will be based on terms that are marketable by outright sale as acceptable security. This is the most significant development for the group in recent years. The contribution made by government towards this conclusion is greatly appreciated.”
Meikles said the group had an opportunity to restructure its activities in both Zimbabwe and South Africa with a view “to secure its affairs in a manner that first and foremost will focus on a strategy that shareholders benefit fully from their investment”.
