In accordance with the requirements of the Indigenisation Act, Meikles Limited lodged its application with the Ministry of Youth Development, Indigenisation and Empowerment for their consideration. The parameters within which full compliance is to be achieved have been agreed with the Ministry and are now in the process of being implemented.
The establishment of the Meikles Limited Employee Share Ownership Trust is one of the parameters and this has now been established through the passing of the special resolution at the EGM of 18 August 2011.
The Staff Share Purchase Scheme which constitutes 10% of the company’s equity, enables the company to have an indigenous shareholding of 51% in compliance with the Act. Of the 10%, workers participation is pegged at 95%, with management taking up the balance.
A supporting requirement was the designation of Mr. Bisset Chimhini, Managing Director of TM Supermarkets, as Employee Share Scheme Representative on the main board.
Secondly the Company was required to reorganise its board of directors to achieve compliance of what the Act refers to as the “governing body”; this has also been achieved. The board will be further restructured in the future to meet King III requirements vis-a-vis independent members of the board.
In relation to the above forward looking statement, suffice to say that all necessary approvals have been received for the exchange of the Group’s investment in Cape Grace Hotel, for equity in Mentor Holdings. Mentor Holdings is a significant private equity group being established to invest in Africa and emerging markets.
The third parameter, which has been agreed in principle, is that Meikles will assist in the creation of a vehicle for 10% of the Company’s equity to be held by a consortium comprised of executive management and indigenous participants. Funding, to the tune of USD6-7 million, at current market rates, for purchase of shares from the market, could constitute the only hurdle to implementation of this parameter.
A collection of parameters which can broadly be described as empowerment transactions related to Cotton Printers’ former employees, for which implementation is at advanced stage, and other groups are in the process of being implemented and full indigensation status is considered imminent.
“The attainment of full indigenisation status and the raising of equity and debt financing to both refinance the Group’s subsidiaries and to invest into new projects are the current pillars upon which the Group expects to add shareholder value in the future,” reported John Moxon, Executive Chairman, at the company’s AGM last week.
For and on behalf of Meikles Limited