Meikles restructures debt

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MEIKLES Limited (Meikles) says it is restructuring its debt to reduce high interest rates that have been eroding its profits.
The group’s borrowings stood at $21,1 million as at July 31, 2018.
“Negotiations are in progress with a banking institution to convert present short term borrowings to medium term loans,” John Moxon, the group’s chairman, said in abridged financial results for the year to March 30, 2018.
“This will result in a rationalisation of our relationships with banking institutions,” he said.
Short term loans attract high interest compared to medium or long term loans.
“The process is expected to be complete by the end of December 2018,” Moxon said.
The group recorded a profit after tax of $8,1 million, recovering from a $746 000 loss incurred in prior comparable period.
In the latest financials, Meikles did not include the debt it is owed by the Reserve Bank of Zimbabwe (RBZ), after government failed to honour an agreement to settle it by the end of August this year.
The diversified group delayed publishing its financials hoping to include the debt settlement.
Repayment of the debt — estimated at $50 million — would have resulted in Meikles announcing a much improved performance compared to the same period last year.
In 2017, Meikles reached an agreement with government over central bank over the two decades-old debt.
The debt accrued in 1998 from transactions related to the group’s dual listing on the Zimbabwe and London stock markets.
In the meantime, the group said the refurbishment of its 50 percent-owned Victoria Falls Hotel will commence before year-end.