Zimbabwe’s Meikles reconsiders new investments after suspension

via Zimbabwe’s Meikles reconsiders new investments after suspension | Reuters Feb 23, 2015

Feb 23 (Reuters) – Hotel group Meikles Africa has put on hold new investment and a possible listing of a subsidiary after the suspension of its shares from trading on the Zimbabwe Stock Exchange, its executive chairman said.

The stock exchange suspended Meikles, which owns two premier hotels in the capital Harare and the resort town of Victoria Falls, last week to allow for an investigation on whether it overstated a debt owed by the central bank.

Executive Chairman John Moxon said in a statement on the company’s website on Feb. 22 that the exchange had not given Meikles an opportunity to defend itself.

Moxon also said the suspension was against the bourse’s listing rules and had put uncertainty into expansion plans by the company which also runs the biggest supermarket chain by branches, TM Supermarkets.

South Africa’s Pik’n Pay Stores Ltd has a 49 percent stake in the supermarket chain.

“The strategy… which was aimed at further expansion in the subsidiaries, the introduction of more investor capital and possibly to even list one subsidiary on the Zimbabwe Stock Exchange are on hold for the time being due to present uncertainty,” Moxon said.

He did not give details but Meikles has started wholesale chain stores, which it planned to expand as well as increase the number of its Pik’n Pay stores from four.

“Meikles will be addressing the implications of the suspension, the manner in which it has been implemented and whether there is any purpose to a listing on the Zimbabwe Stock Exchange,” he said.

The exchange said Meikles reported in its 2014 full year results that it was owed $90.8 million by the Reserve Bank of Zimbabwe, compared with $40.51 million owed by the bank in 2013, without giving an explanation for the sharp increase.

Moxon said the figures were correct and had been a product of painstaking negotiations with the central bank, which he labelled a “delinquent debtor”.

Central bank Governor John Mangudya told Reuters on Monday he had no comment on the matter. (Reporting by MacDonald Dzirutwe; Editing by James Macharia)