HARARE – Meikles Limited plans to unbundle its 100 percent-owned agricultural processing business, Tanganda Tea Company Limited pending approval from shareholders to be sought in due course.
The unbundling, according to a notice issued by the Group on Thursday, will see Tanganda separately list on the Zimbabwe Stock Exchange (ZSE).
“To this end, the Company has engaged professional advisors. Shareholder approvals will be sought in due course, with these processes running alongside normal year-end procedures,” the Group said.
“Shareholders and members of the investing public are advised to exercise caution and consult their professional advisors before dealing in the Company’s shares until the full details of the transaction(s) are announced or upon withdrawal of this cautionary.”
Meikles Limited is primarily invested in the agriculture, hotels and retail sector. The Group operates six business segments; hospitality, retail stores which includes supermarkets and wholesalers, and agricultural, financial services and security.
Its well-known brands include the Victoria Falls Hotel which is a 50-50 joint venture with African Sun and a shareholding in the Cape Grace Hotel in Cape Town, South Africa. Its supermarkets are operated in partnership with TM Pick n Pay, while it exited department stores in the first quarter of the 2020 financial year. Tanganda Tea Company which represents the agricultural segment produces, packs and distributes Zimbabwe’s famous tea brand as well as Tinga Mira, a bottled spring water brand. Tanganda Tea Company also owns estates that produce avocados and macadamia nuts.
The unbundling of Tanganda Tea marks another major move in a few year’s time following the sale of the Group’s past flagship asset the Meikles Hotel to Dubai-based Albwardy Investments at the end of February 2020 for US$20 million.
During the half-year ended 30 September 2020 (H1 FY2021), bulk tea production declined by 17% due to adverse weather, while packed tea sales volumes grew by 14%. During that period, macadamia production also declined by 37%, and the volume of avocado sales export grew by 15%.
In the previous full financial year ended 31 March 2020, export earnings from macadamia nuts, avocadoes and coffee grew by 78% from US$ 4.5 million in 2019 to US$ 8 million. However, penetrating export markets has been challenging in 2020 as a result of COVID-19 induced restrictions and this has pushed prices down.
The Group highlighted that during the first half of the FY 2021 financial year, average price for avocadoes declined by 37% due to the lockdowns in Europe that resulted in massive closure of restaurants and hotels.
Meikles share price has climbed by 65% year to date.
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