BY TATIRA ZWINOIRA
MEIKLES Limited says it expects to list Tanganda Tea Company Limited (TTCL), on the Zimbabwe Stock Exchange (ZSE) on February 3, 2022 after being granted a tax relief.
TTCL was initially supposed to list on the ZSE on December 9, 2021 but deferred as Meikles sought the Zimbabwe Revenue Authority approval for capital gains tax relief.
The tax relief was for the demerger of TTCL from the Meikles Group first announced in March 2021.
“Shareholders are advised that Zimbabwe Revenue Authority (Zimra) granted the company the capital gains tax relief provided under section 15 (1) (b) of the Capital Gains Tax Act [Chapter 23:01] for only 51,39% of the issued shares. Consequently, there is a residual capital gains tax amount to be paid on the Demerger of Tanganda,” Meikles said in a statement on Friday.
“To consummate the Demerger transaction, the directors have authorised the company to pay the residual capital gains tax liability.
“Processes to finalise the assessment of the capital gains tax liability prior to the implementation of the demerger and the listing of Tanganda are in progress.
“The deferment to complete the transaction only affected the implementation and listing dates advised as per notice dated November 16, 2021. With all the conditions precedent having been met, the tentative implementation and listing dates are 1 and 3 February 2022, respectively.”
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The demerger of TTCL from Meikles comes as the group believes the former was now in a solid financial and agricultural position, and therefore ready to unlock shareholder value as a stand-alone, value enhancing export business.
Thus, the listing of TTCL could help in capital raising initiatives for Meikles shareholders.
“The board of Meikles regrets the inconvenience caused to shareholders by the deferment but this is being done in the best interest of all shareholders,” Meikles said.
According to the demerger arrangement, subject to fulfilment of the conditions precedent, Meikles shareholders will be entitled, in terms of the distribution ratio, to receive one TTCL share for every one Meikles share held as at the record date.
On implementation of the proposed transaction, Meikles shareholders will receive their pro-rata portion of 100% of the shares of Tanganda currently held directly by Meikles.
The proposed transaction will enable Meikles shareholders to own a direct shareholding in TTCL.
In its pre-listing statement dated October 26, 2021, TTCL was reported as being valued at $5 183 482 196 or nearly US$61,41 million in terms of its total assets as of March 31 last year.
TTCL is divided into three units — agriculture, beverages, corporate and administration divisions.
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