Meikles Limited Thursday said it would go ahead with its extraordinary general meeting (EGM) as advised, and this puts Nigel Chanakira’s fate squarely in the hands of shareholders who will be asked to vote to adopt revised terms for the group’s demerger.
Chanakira, the founder and current group CEO of KFHL, is reportedly sweating to secure funds to acquire 42,9% held by the Meikles family, led by John Moxon, and 10,5% that a consortium led by Rugare Chidembo acquired from Econet’s EW Capital in September last year.
According to a member of the Meikles Limited board, this is a little too late.
“We will do what our shareholders asked us to do,” a member of the Meikles Limited board said yesterday. “That’s all we can say for now.”
The EGM’s main business would be to amend the terms of the demerger resolution adopted by shareholders in June last year, which gave Chanakira a chance to agree terms with Meikles and Econet Wireless Zimbabwe to acquire the two investors’ equity interest in KFHL, but on a number of conditions.
The official said the Meikles Limited board would not be altered from its resolution to throw out Chanakira’s bid for Meikles’ KFHL shares a fortnight ago, saying the embattled banker’s debt-financing proposal was not convincing.
The board voted to proceed with Meikles Limited’s demerger, retaining control of KFHL, the holding company of Kingdom Bank Limited, Kingdom Asset Management and Discount Company of Zimbabwe.
Old Mutual is KFHL’s third largest shareholder with 10%.
The board had given Chanakira up to the sixth of this month to submit a payment plan for the $15 million equity deal, which had been phased into two.
After the demerger, Meikles Limited will retain 42,9% of KFHL, 75% of TM Supermarkets and 100% of Tanganda Tea Company, Thomas Meikles Centre, which holds the hotels division and department stores and Cotton Printers, now in liquidation.
Before KFHL’s merger with Meikles in January 2008, Chanakira had ceded 10,5% of the banking institution to EW Capital and 34-35% to the Meikles family through debt-equity swaps agreed to recapitalise the bank in terms of Reserve Bank of Zimbabwe minimum capital requirements.
The disposals reduced Chanakira’s shareholding to just 2,9%.
As things stand, Chanakira has two options. Either he convinces the Meikles board to give him another chance, or rallies minorities against the recommendation of the board at the EGM.The probablity is not 50/50 but at best, 90/10 against Chanakira.
Should the tide go against Chanakira, Moxon would retain majority control of KFHL, which endues upon him the right to make two board appointments, including the CEO.