Meikles Limited says it has lodged its indigenisation application with the Ministry of Youth Development, Indigenisation and Empowerment for their consideration.
In a statement on Wednesday, the company said parameters within which full compliance would be achieved had been agreed with the ministry and were 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 since been set up after it was passed as a special resolution at the recent extraordinary general meeting (EGM).
The Staff Share Purchase Scheme, which constitutes 10% of the company’s equity, will enable the company to have an indigenous shareholding of 51% in compliance with the Indigenisation and Empowerment Act.
Of the 10%, workers’ participation is pegged at 95%, with management taking up the balance.
“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,” company executive chairman John Moxon said at the EGM last week.
A supporting requirement was the designation of Bisset Chimhini, managing director of TM Supermarkets, as Employee Share Scheme representative on the main board.
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 would be further restructured in the future to meet King III requirements vis-a-vis independent members of the board.
Meikles said all necessary approvals had 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 would assist in the creation of a vehicle for 10% of the company’s equity to be held by a consortium made up of executive management and indigenous participants.
“Funding, to the tune of $6-7 million, at current market rates, for purchase of shares from the market, would constitute the only hurdle to implementation of this parameter,” reads part of the statement.