Meikles recovers $26 million owed by central bank

Meikles recovers $26 million owed by central bank

By Chipo Musoko, HARARE, August 20 (The Source) – Retail and hospitality group, Meikles Limited on Tuesday said it has recovered $26 million in interest accrued from the $76, 5 million it is owed by the central bank.

The debt stems from the money seized from the group’s Foreign Currency Account by the Reserve Bank of Zimbabwe over a decade ago and used mainly for quasi-fiscal activities.

Meikles group chairman, John Moxon told shareholders the company held a “very successful” meeting with the central bank over the issue last Friday.

“From a profit and loss point of view, we have recovered that $26 million which will be reflected in our financials, at the end of September this year,” he said.

“Our net interest costs are now acceptable and that is a major change to this group in terms of profit and loss.”
However, he said the repayment would not have a positive impact on the group’s cash flows as the company was still awaiting access to the outstanding funds held with RBZ.

“The central bank is working on modalities to enable us to access the funds owed in the next months. It gives us a lot of confidence that if we fail to get these funds then it is the government’s responsibility,” he said.

He said the group would continue to implement more stringent expense controls to cushion it from the current “economic downturn.”

On the group’s mining interests, a director Mark Woods said the company’s partner, Centar would inject $500 million into the business while agreements had been signed with various people with a view to partnerships or to purchase some mining projects.

The Zimbabwe Investment Authority have since licenced the partnership with Centar, which is now awaiting the approval of the Competition and Tariff Commission.

The group reported modest interims for three months to June 30 with most divisions showing growth.
It secured long-term funding for all its projects including the refurbishment of the hotels, the tea plantation and the refurbishment and outfitting of new stores in TM Supermarkets.

During the period under review, tea production at Tanganda was 33 percent higher than same period last year.
The beverage tea sales in the local market slowed down in the first quarter but increased in the regional sales in Namibia and Zambia increased. New markets for packed tea in South Africa, Mozambique and Botswana are being developed.

Purified spring water production improved and volumes for the quarter rose 59 percent.

Trading in TM Supermarkets was within expectations as turnover grew five percent. The branch refurbishment is underway in Masvingo, Gweru and Harare CBD branches. The supermarkets division added two outlets in July, bringing its stores portfolio to 51.

At Thomas Meikles Stores, trading remained subdued. Meikles Hospitality operations registered a three percent decrease in turnover compared to the same period last year.