Regulatory approval delays are hindering the recapitalisation of Meikles Limited’s retail unit, TM Supermarkets, through a Pick ‘n’ Pay investment, chairman John Moxon said.
In a statement attached to the group’s full-year financial results to March 2011, Moxon said the delays had “seriously hindered” the group’s ability to recapitalise TM Supermarkets, the largest retail chain in the country.
Meikles and Pick ‘n’ Pay recently concluded negotiations for the South African retail giant to purchase a further 24% stake of TM.
Should the deal be completed, Pick n’ Pay’s total shareholding in TM would be 49%. The transaction is awaiting approval by the Reserve Bank of Zimbabwe and the Ministry of Indigenisation.
TM Supermarkets is a 75%-owned subsidiary of Meikles Africa.
The grocery chain presently operates 50 branches nationwide.
“The much awaited Pick ‘n’ Pay deals is still to be approved by the regulatory authorities. This has seriously hindered our ability to recapitalise TM.
However, we are progressing with alternative funding which will enable us to revamp stores and ensure adequate levels of working capital,” Moxon said.
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Moxon said the group would be introducing Pick ‘n’ Pay clothing in TM Stores in the coming months as a way of enhancing the supermarkets’ range and value.
The group said it expects the subsidiary to be the major contributor to the group’s top and bottom line going forward.
The group recorded an EBIDTA of $3,9 million for TM Supermarkets for the fifteen months ending March 31 2011 compared to a loss of $5,9 million in 2010.
Meikles Limited recorded an increase in revenue to $330 million for the fifteen months ending March 31 compared to $148 million for the 12 months to December 2009.
The group reported a profit of $6,1 million from a loss of $3,5 million.
Meikles said it was currently engaging the Ministry of Youth Development and Indigenisation and Empowerment on its proposed employee share ownership trust that was submitted to the ministry.
Moxon said its hotels division registered growth in occupancy levels reflecting a strong interest in Zimbabwe as both a tourist and business destination.
Occupancy levels were at 43%, 45% and 66% compared to 30%, 29% and 57% respectively for Meikles Hotel, the Victoria Falls Hotel and Cape Grace Hotel.
“Funding is in place for the first phase of the refurbishment of Meikles Hotel and this will begin in the next month. Further funding is being sorted out for the complete refurbishment of the hotel,” Moxon said.
He said the work on the refurbishment of Victoria Falls Hotel has been completed and they were engaging partners to finalise the project and seek medium to long-term funding for its completion.
l Meanwhile Tanganda Tea Company Limited posted a EBIDTA of $502 000 compared to $1,6 million in 2010.
The subsidiary’s mineral water plant is expected to be commissioned in due course.
