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Harare – Indigenous Zimbabwean shareholders are struggling to pay for the remaining 18% shareholding in SABMiller's [JSE:SAB] Zimbabwean unit Delta Corporation reserved for compliance with the country’s empowerment policy.
CEO Pearson Gowero said on Thursday that the company is currently 33% owned by local investors.
Zimbabwe has in the past few years crossed swords with international companies operational in the country over its bid for a speedy handover of majority control to black Zimbabwean groups.
Analysts and investment fund managers have however blamed indigenisation for driving down investment into the country. The central bank said last month that investment flows into Zimbabwe during the first half of 2014 had declined by as much as 59% to US$67m, compared to the same period last year.
Delta has a $1.6bn capitalisation on the Zimbabwe Stock Exchange, with SABMiller controlling around 37% of the Zimbabwean beverages concern. Gowero told Zimbabwe’s parliament on Thursday that the global brewer was more of a strategic and technical partner for Delta and did not have absolute control of the company.
“They are not a controlling shareholder and so the management of Delta does not report to some foreign authority. We report to a local board of directors appointed by the shareholders,” said Gowero.
Concerns have been mounting that the local management of international companies in Zimbabwe such as Zimplats (owned by Impala Platinum), Delta Corporation and British American Tobacco Zimbabwe do not have the power to make decisions.
The government wants companies to procure at least half of their raw materials and inputs from local suppliers, among other demands.
“The company is currently valued at $1.6bn and hence indigenous Zimbabweans need to raise a minimum of $300m to pay for the 18% that is required to achieve 51%,” said Gowero.
He explained that the company had initially submitted its indigenisation compliance plan to the government in 2007 when the policy was passed into law, and had updated that plan in 2012. Government departments such as the state pensions scheme and the National Social Security Authority were informed over the years to buy shares but have failed to raise funds to purchase the shares.
“Currently about 33% of the shareholding is considered indigenous. However, the shareholding changes hands every day. Most of the shares trading on the Zimbabwe stock exchange today are bought by foreign funds or shareholders,” he said.
Implats, Amplats empowerment deals to be reviewed
In a bid to plug the funding deficit hindering indigenous investors from purchasing shares in foreign controlled companies under the empowerment drive, President Robert Mugabe’s government is now set to review empowerment deals agreed with Zimplats, Mimosa and Unki mines – controlled by Implats [JSE:IMP], Aquarius [JSE:AQP] and Anglo Platinum [JSE:AMS] respectively.
The reviews are expected to rule out provisions mandating the government to pay for the shares to be ceded to local groups. A new provision will now be inserted saying the mineral resources that companies are mining in Zimbabwe will constitute payment for the shares to be ceded under the controversial empowerment policy.
Zimbabwe’s economy has struggled to fire on all cylinders, with company closures, retrenchments and low investor appetite contributing to a stagnation that has been worsening since Mugabe won last year’s July elections.
ALSO READ: Dire economy takes $108m toll on Zim workers
CEO Pearson Gowero said on Thursday that the company is currently 33% owned by local investors.
Zimbabwe has in the past few years crossed swords with international companies operational in the country over its bid for a speedy handover of majority control to black Zimbabwean groups.
Analysts and investment fund managers have however blamed indigenisation for driving down investment into the country. The central bank said last month that investment flows into Zimbabwe during the first half of 2014 had declined by as much as 59% to US$67m, compared to the same period last year.
Delta has a $1.6bn capitalisation on the Zimbabwe Stock Exchange, with SABMiller controlling around 37% of the Zimbabwean beverages concern. Gowero told Zimbabwe’s parliament on Thursday that the global brewer was more of a strategic and technical partner for Delta and did not have absolute control of the company.
“They are not a controlling shareholder and so the management of Delta does not report to some foreign authority. We report to a local board of directors appointed by the shareholders,” said Gowero.
Concerns have been mounting that the local management of international companies in Zimbabwe such as Zimplats (owned by Impala Platinum), Delta Corporation and British American Tobacco Zimbabwe do not have the power to make decisions.
The government wants companies to procure at least half of their raw materials and inputs from local suppliers, among other demands.
“The company is currently valued at $1.6bn and hence indigenous Zimbabweans need to raise a minimum of $300m to pay for the 18% that is required to achieve 51%,” said Gowero.
He explained that the company had initially submitted its indigenisation compliance plan to the government in 2007 when the policy was passed into law, and had updated that plan in 2012. Government departments such as the state pensions scheme and the National Social Security Authority were informed over the years to buy shares but have failed to raise funds to purchase the shares.
“Currently about 33% of the shareholding is considered indigenous. However, the shareholding changes hands every day. Most of the shares trading on the Zimbabwe stock exchange today are bought by foreign funds or shareholders,” he said.
Implats, Amplats empowerment deals to be reviewed
In a bid to plug the funding deficit hindering indigenous investors from purchasing shares in foreign controlled companies under the empowerment drive, President Robert Mugabe’s government is now set to review empowerment deals agreed with Zimplats, Mimosa and Unki mines – controlled by Implats [JSE:IMP], Aquarius [JSE:AQP] and Anglo Platinum [JSE:AMS] respectively.
The reviews are expected to rule out provisions mandating the government to pay for the shares to be ceded to local groups. A new provision will now be inserted saying the mineral resources that companies are mining in Zimbabwe will constitute payment for the shares to be ceded under the controversial empowerment policy.
Zimbabwe’s economy has struggled to fire on all cylinders, with company closures, retrenchments and low investor appetite contributing to a stagnation that has been worsening since Mugabe won last year’s July elections.
ALSO READ: Dire economy takes $108m toll on Zim workers
