Ndakaziva Majaka 28 February 2017
HARARE – Zimbabwe’s largest cigarette manufacturer, British American
Tobacco (BAT), is failing to pay over $5 million in dividend to its
offshore major shareholder due to cash challenges.
BAT finance director, Lucas Francisco, last week told the businessdaily
that his company was negotiating with its major shareholder and local
banks to salvage the situation.
The cigarette maker’s major shareholder is British American Tobacco
International Holdings (United Kingdom) Limited, which holds a 42,98
percent shareholding and over 8,8 million shares in the Zimbabwe Stock
“Basically, the final dividend for 2015 and mid-year dividend for 2016 is
still outstanding. We are looking at an amount of over $5 million.
“We have been engaging, but despite the dividends being on the priority
list the fact is there is no money. So, the little cash that the country
is generating is used to prioritise the key inputs that are required for
production,” Francisco said.
Zimbabwe has been battling an acute cash shortage on the back of depleted
nostro balances, leading to multi-national companies with shareholders
outside the country failing to remit dividend to their respective
Industry estimates indicate that transactions worth over $1 billion are on
hold as local banks struggle to meet international payments on behalf of
The BAT finance director also pointed out that the country did not have
money to facilitate the dividend payment.
“We are having a conversation with the shareholder on how to make it up to
them; this is the conversation that is taking place at the moment with the
“As you can imagine, it is not our money we always have to consult the
shareholder and find out what options we have to try and move that money
“But the priority remains to remit the dividend; if we fail to do that
then we may have to explore other options,” he said.
In the year ended December 2016, BAT declared a final dividend of $0,33
per share. This, together with an interim dividend of $0,18 per share,
will bring the total dividend for 2016 to $0,51, a decrease of 44 percent
The latest dividend declaration pauses fresh challenge for the company as
the outstanding dividend piles.
Meanwhile, the cigarette company posted an $8,5 million profit in 2016,
down from a prior profit of $15,5 million, weathering toughening economic
In 2016, BAT also saw a 21 percent slump in sales volumes as consumer
disposable incomes shrunk, but managed to maintain its 79 percent market