Conglomerate Meikles Limited said this week it had postponed the unbundling of its 97-year-old tea production unit, Tanganda, which is seeking a separate listing on the Zimbabwe Stock Exchange (ZSE).
Tanganda was supposed to be listed on December 2, 2021, but the company is now to be listed on December 9 as Meikles seeks capital gains tax reprieve from the Zimbabwe Revenue Authority (ZIMRA).
This has seen Meikles also postpone the annual general meeting (AGM) and an extraordinary general meeting (EGM), which were scheduled to have taken place yesterday (on November 18), will now take place on December 1, 2021.
“This is to allow time to secure capital gains tax relief approval from ZIMRA. As a result of the postponement, Tanganda is now expected to list on the ZSE on December 9, 2021,” the company said in a statement.
According to the law, Meikles is supposed to pay Capital Gains Tax (CGT), which is a tax levied on the capital gain arising from the disposal of a specified asset.
ZIMRA defines specified assets as immovable property such as land and buildings and any marketable security like debentures, shares, unit trusts, bonds and stock.
However, an Initial Public Offering (IPO) can be exempted from the CGT, which is the basis on which Meikles has applied to be exempted from the levy on the listing of Tanganda.
The transaction, which was announced in April this year and confirmed in late September 2021, is part of several crucial deals being planned by the diversified group, whose interests span across the hospitality sector, security services and real estate, and so unbundling will see Meikles trimming its scope of operations to hospitality and retail chains.
Commenting on the unbundling programme, Meikles chairperson John Moxon said he wanted to give Tanganda the chance to wander along independently and discover embedded capabilities that have been overshadowed by the current corporate structure.
Tanganda is the largest producer, packer and distributor of tea in Zimbabwe. It had its first commercial tea planted in 1924.
If Meikles shareholders approve the unbundling at an extraordinary general meeting slated for December 1, 2021, they will be entitled to receive one Tanganda share for every one Meikles share.
“The proposed transaction will enable Meikles shareholders to own a direct shareholding in Tanganda. A separate listing is to be sought for Tanganda on the ZSE by way of an introduction…
“In this regard, the ZSE has indicated approval, subject to the implementation of the proposed de-merger, for the admission of the entire issued share capital of Tanganda to the official list pursuant to the listing, on or about December 2, 2021,” Moxon said in September.
Tanganda said it “was now in a solid financial and agricultural position, and therefore that shareholder value would best be served for Tanganda to function as a stand-alone, value-enhancing export business”. – Herald