Meikles delays unbundling of Tanganda because of Zimra tax
Tapiwanashe Mangwiro Senior Business Reporter
Conglomerate Meikles Limited announced this week that it has postponed the unbundling of its 97-year-old tea production unit, Tanganda, which is seeking to be separately listed on the Zimbabwe Stock Exchange (ZSE).
Tanganda was supposed to be listed on December 2, 2021, but the company is now due to be listed on December 9 as Meikles seeks a stay of capital gains tax from the Zimbabwe Revenue Authority (ZIMRA).
This has seen Meikles also postpone the Annual General Meeting (AGM) and an Extraordinary General Meeting (EGM), which was scheduled to take place yesterday (November 18), will now take place on December 1, 2021.
“This gives time to get approval for capital gains tax relief from ZIMRA. As a result of this postponement, Tanganda is now expected to be listed on the ZSE on December 9, 2021, ”the company said in a statement.
By law, Meikles is supposed to pay Capital Gains Tax (CGT), which is a tax levied on the capital gain resulting from the disposal of a specified asset.
ZIMRA defines specified assets as real estate such as land and buildings and any negotiable securities such as bonds, stocks, mutual funds, bonds and stocks.
However, an Initial Public Offering (IPO) may be exempt from CGT, which is the basis on which Meikles requested to be exempt from Tanganda listing tax.
The transaction, which was announced in April this year and confirmed at the end of September 2021, is part of several crucial deals planned by the diversified group, whose interests span the hospitality, security services and real estate sector. , and therefore unbundling will see Meikles reducing its scope of activities to hotel and retail chains.
Commenting on the unbundling program, Meikles chairman John Moxon said he wanted to give Tanganda the opportunity to walk around independently and experience built-in capabilities that have been overshadowed by the current corporate structure.
Tanganda is the largest tea producer, packager and distributor in Zimbabwe. He had his first commercial tea planted in 1924.
If Meikles shareholders approve the dissociation at an extraordinary general meeting scheduled for December 1, 2021, they will be entitled to receive one Tanganda share for each Meikles share.
“The proposed transaction will allow Meikles shareholders to have a direct stake in Tanganda. A separate entry is to be found for Tanganda on the ZSE as an introduction …
“In this regard, the ZSE has indicated its approval, subject to the implementation of the demerger project, for the admission of all the issued share capital of Tanganda to the official list in accordance with the registration, on or about December 2, 2021, ”Moxon said in September.
Tanganda said it “is now in a strong financial and agricultural position, and therefore shareholder value would be better served for Tanganda to function as a self-sustaining and rewarding export business.”