Meikles Africa Limited, the Zimbabwe and London-listed conglomerate, is aiming to raise up to USD 62m through either private placements or through the London or Zimbabwe stock exchanges, CEO Nigel Chanakira said.
The company, which has hotel, retail, financial services, cotton and tea operations, will use the funds to refurbish and extend one of its hotels, to automate its retail banking operations and to restock selected retail stores.
Speaking on the sidelines of the Securities Africa conference in London, Chanakira said the fundraising could take place in two tranches, with potentially around USD 12m raised through a private placement ahead of the Zimbabwe elections on 29 March. A further USD 50m placement would be launched after the elections, either through the London or Johannesburg stock exchanges or through a private placement. These funds would be used to refurbish and create an additional 160 rooms for the 120-room Victoria Falls Hotel and to refurbish the Meikles Hotel. They would also be used to mechanise the tea harvest at its Tanganda Tea Company estates and to restock the company’s retail operations. The board will meet to discuss the fundraising proposals today (Monday, 17 March), said Chanakira.
On the question of potential future listings, Chanakira said the company was in discussions with the Reserve Bank of Zimbabwe for a full dual listing on the London Stock Exchange. A Johannesburg Stock Exchange listing was also under consideration, he said.
Forty-three percent of Meikles Africa Limited is owned by the Meikles family, with Old Mutual and Econet as significant shareholders with around 10% each. The company has a free float of 20% with shares also listed on the London Stock Exchange. It is the largest listed company on the Zimbabwe Stock Exchange, with a market capitalisation of circa USD 500m, according to Chanakira.
The company’s retail division includes department stores, supermarkets and convenience stores, including TM Supermarkets and the Meikles, Barbours and Greatermans department stores. Its Meikles Africa Hotel division operates the Meikles Hotel in Zimbabwe, as well as the Victoria Falls Hotel through a 50% partnership with Africa Sun Limited. This division also owns the 120-room Cape Grace Hotel in South Africa. Previous reports have noted that the company will make investments into its hotel assets in time for the 2010 Football World Cup, which is being hosted in South Africa. The company reported growth in hotel occupancies of 13% for the financial year ended 31 March 2007.
Other divisions in the group include tea and textile operations.
When asked about the company’s financial services division, Chanakira noted that the company was keen to expand through acquisitions and, in particular, was interested in acquiring a banking licence in Botswana. He noted that the company complied with Zimbabwe’s recently passed Indigenisation Act, which requires all listed Zimbabwe companies to be at least 51% owned by native Zimbabweans. Group secretary Andrew Lane-Mitchell commented: “Meikles Africa Limited is one of the more significant companies to already comply with this Act – so there is potential for us to be considered White Knights for the Zimbabwe companies that do not reach the 51% ownership threshold.”