16th Oct 2007 08:00
Meikles Africa Ld16 October 2007 MEIKLES AFRICA LIMITED (Incorporated in Zimbabwe in 1937 under company registration number 1/37) Directors: J. R. T. Moxon, M. Masunda, D. Mills*, D. E. Stephens, C. B. Thorn*, M. S. Wilson *Executive Director Address: 99 Jason Moyo Avenue, Harare, (PO Box 3598), Harare. Email address: www.meiklesafrica.co.zw ANNOUNCEMENT TO SHAREHOLDERS OUTLINING THE SALIENT FEATURES OF THE OFFER BY MEIKLES AFRICA LIMITED FOR THE ACQUISITION OF THE ENTIRE ISSUED SHARE CAPITAL OF KINGDOM FINANCIAL HOLDINGS LIMITED, TANGANDA TEA COMPANY LIMITED AND COTTONPRINTERS (PRIVATE) LIMITED, AND NOTICE OF EXTRAORDINARY GENERAL MEETING ("EGM") Financial Advisors IMARA CORPORATE FINANCE ZIMBABWE (PRIVATE) LIMITED Reporting Accountants to and Auditors of Meikles Sponsoring Brokers Africa Limited DELOITTE AND TOUCHE RENAISSANCE SECURITIES (PRIVATE) LIMITED Members of the Zimbabwe Stock Exchange Financial Advisors to the Independent directors of Legal Advisors Meikles Africa Limited GILL GODLONTON & GERRANS ERNST AND YOUNG GILL, GODLONTON AND GERRANS PART 1: CHAIRMAN'S LETTER 1. INTRODUCTION This summary presents the salient information regarding the proposed merging ofthe business interests of Meikles Africa Limited ("Meikles"), Kingdom FinancialHoldings Limited ("Kingdom"), Tanganda Tea Company Limited ("Tanganda") andCotton Printers (Private) Limited ("Cotton Printers") ("The Proposed Transaction"). The detailed terms and conditions of the Proposed Transaction are more fully setout in the Circular to Shareholders ("Circular") to be sent out on or about 16October 2007. The Circular should be read in its entirety for the fullappreciation of the rationale for and implications of the Transaction, as wellas to determine the action required by Meikles Shareholders with respect to theProposed Transaction. This announcement should accordingly, be read in conjunction with the Circular,and with reference to the definitions contained therein. 2. PROPOSED TRANSACTION The Board is proposing to merge the business interests of Meikles Africa,Kingdom, Tanganda and Cotton Printers through the issue of up to 78 112 138Meikles Africa Shares to the existing Kingdom, Tanganda and Cotton PrintersShareholders. Meikles Africa's authorised share capital is to be increased to give effect tothe Proposed Transaction and ensure adequate provision for any future expansionand working capital requirements of the Enlarged Meikles Africa group. The Board proposes the revision of the Articles of Association to accommodate anincrease in the number of directors, the appointment of five additionalDirectors to the Meikles Africa Board and the Name Change from "Meikles AfricaLimited" to "Kingdom Meikles Africa Limited" ("KMAL") to better reflect theidentity of the enlarged Meikles Africa group, assuming implementation of theTransaction. Furthermore, a new Kingdom Meikles Africa Staff Share PurchaseScheme is being proposed to aid the Board in attracting and retaining keyskilled staff members. Full details of the rationale for, mechanics of and effects of the ProposedTransaction are set out in paragraphs 4 and 5 of this Announcement. Authorisation to undertake the Proposed Transaction comprising the offer to theshareholders of Kingdom, Tanganda and Cotton Printers, the Restructuring, theappointment of five additional Directors, the adoption of the Staff Share Schemeand the Name Change, is being sought by the Board from Meikles AfricaShareholders at the EGM to be held at 9:00 hours on Tuesday 6 November 2007 inthe Mirabelle Room, Meikles Hotel, 3rd Street, Harare. The purpose of this Document is, accordingly, to furnish Meikles AfricaShareholders with the requisite statutory and regulatory information relating tothe Proposed Transaction and to detail the action to be taken by eachShareholder with respect to the various corporate actions proposed herein. 3. CURRENT MEIKLES AFRICA GROUP PROFILE 3.1 Background North Charterland Exploration Company (1937) Limited ("Northchart") wasincorporated in 1937. It was initially formed to be a mining company and had asmall group of shareholders. In 1961, Lonrho Plc acquired a controllinginterest in Northchart and Northchart was then used as Lonrho's vehicle forinvestments in Zimbabwe. It obtained a listing in London in 1943 and wassubsequently listed in Zimbabwe in 1969. In 1996, Lonrho Plc sold its shareholding in the company as part of itsdivestiture programme. At this time, Meikles Consolidated Holdings acquired 30%of Northchart and took over the management of the company by virtue of Meikles'senior management becoming directors of the company, with John Moxon becomingChairman and Chief Executive. Later in 1996, Northchart entered into an agreement pursuant to which itacquired the entire issued share capital of Thomas Meikle Centre and 75% of theissued share capital of TM Supermarkets from Meikles Consolidated Holdings.These two were the primary operating businesses of Meikles ConsolidatedHoldings. Following this Northchart's name was changed to Meikles AfricaLimited. The 1996 Northchart reverse listing raised US$ 68 million through aprivate placement on the London Stock Exchange ("LSE") at which time the LSElisting became secondary as the Company moved its primary listing to theZimbabwe Stock Exchange ("ZSE"). Since listing Meikles Africa has expanded its operations through the purchase ofa 50% interest in the lease Zimbabwe Sun International has to lease the VictoriaFalls Hotel and has purchased 100% of the Cape Grace Hotel in South Africa. In1999 the Company purchased a 25% shareholding in Kingdom Financial HoldingsLimited. In 2001 Meikles Africa and Kingdom entered into a joint venture tofinance the Meikles Africa Stores Division's credit operations under the nameMeikles Financial Services. Meikles Africa holds 49% of Meikles FinancialServices and Kingdom holds 51%. Meikles Africa increased its shareholding inKingdom to 32,9% by following its rights in, and partly underwriting rightsissues held in 2005 and 2006. 3.2 Overview of Meikles Africa's operations Current group structure of Meikles Africa: Shown below is the current group structure of Meikles Africa: To view the group structure paste the following link into your web browser to download the PDF document related to this announcement: http://www.rns-pdf.londonstockexchange.com/rns/7395f_-2007-10-16.pdf 3.2.2 Current outlook Since the latest published information for the year ended 31 March 2007 MeiklesAfrica has experienced price control regulations that have affected each of thedivisions of the Company. On the retail side TM Supermarkets has been unable to source the requiredvolumes of products to replace those which moved very quickly at the time of thenew price regulations. Bakery operations have been severely affected byshortage of flour and power outages. Action has been taken to address theseissues and plans are advancing to open three new branches shortly. Department Stores have also been affected but stock replacement has been moresuccessful. Sales on credit ceased in July but the replacement cash sales didnot result in customer resistance and sales performance was higher thananticipated. For both retail divisions, proposed pricing formulae continue to be recommendedto the authorities. Notwithstanding the difficult market conditions during thecourse of the last few months, which affected margins, greater focus on costmanagement assisted in both divisions remaining profitable although the cost ofstock replacement will impact heavily on future cashflows. Price controls and stock availability also affected the Meikles and VictoriaFalls Hotels. However, increases in occupancy and price changes approved by theZimbabwe Tourism Authority cushioned the impact, with both hotels remainingprofitable. The Cape Grace is performing at occupancy levels above last yearand current budgets. There are positive potentials that should arise from the recent Monetary PolicyStatement presented by the Governor of the Reserve Bank. The ability ofmanufacturers and suppliers to return to production levels that ensure greaterlocal stock availability is key as are pricing formulae that maintain viability. 4. RATIONALE FOR AND MECHANICS OF THE PROPOSED TRANSACTION 4.1 RATIONALE FOR THE PROPOSED TRANSACTION 4.1.1 Critical Mass The Proposed Transaction will lead to enhanced critical mass for the groupleading to improved access to international capital and improved businessefficiencies to the shareholders of Meikles Africa, Kingdom, Tanganda and CottonPrinters. 4.1.2 Efficient foreign currency utilisation Within the group, Meikles and Tanganda generate foreign currency and to a lesserextent so do the foreign subsidiaries of Kingdom. The enlarged group is betterable to channel these foreign currency earnings to the respective subsidiariesof Kingdom Meikles Africa. The foreign currency generated by the enlarged groupwill be more effectively used in projects, which include the fulfilment ofTanganda's capital investment and expansion plans, Kingdom's regionaldevelopment and the multi-million dollar expansion of the Victoria Falls Hoteland the refashioning of the Meikles Hotel. 4.1.3 Enhanced synergies and efficiencies The performance of the enlarged group will result in efficiencies, which willreduce costs, motivate expansion and enhance profits to a level that is higherthan the sum of the individual components to all stakeholders. The enlargedGroup will also utilise its enhanced resource base to create synergies withinthe group treasuries and to strengthen customer and supplier relationships. 4.1.4 Enhanced cash generation The larger group will be cash positive, which will enable former Tangandashareholders to enjoy dividends, payment of which has not been possible for someyears. The transaction will lead to efficiencies and cost savings in a number ofareas 4.1.5 Shareholding Structure Recently the Economic Empowerment Bill passed through both the House of Assemblyand Senate of Zimbabwe. This legislation now awaits Presidential signature.This legislation provides that a minimum of 51% of all Zimbabwean companies beheld by indigenous Zimbabweans. Assuming fulfillment of the ConditionsPrecedent, the Proposed Transaction will result in the resulting Kingdom MeiklesAfrica meeting the provisions of this Bill. Further details of the existing Kingdom, Tanganda and Cotton Printers operationsand financial performance are found in the Circular to Shareholders to be postedon or about 16 October 2007. 4.2. MECHANICS OF THE PROPOSED TRANSACTION The Proposed Transaction, on completion, involves the issue of Meikles AfricaShares to the shareholders of Kingdom, Tanganda and Cotton Printers. 4.2.2 Offer to Kingdom Shareholders 4.2.2.1 Mechanics of the Kingdom Offer Meikles Africa currently holds 32,9% of the existing Kingdom share capital, andthe offer is therefore for the remaining 67,1% not already held by MeiklesAfrica. Pursuant to this, Meikles Africa is offering the shareholders ofKingdom 17,67 new Meikles Africa shares for every 100 Kingdom shares held, witha cash alternative of $32 318 per each Kingdom share held. Fractionalentitlements will be rounded up to the nearest whole Meikles Africa share. As aresult of this offer, Kingdom has proposed a Scheme of Arrangement betweenitself and its shareholders under Section 191 of the Companies Act. To thisend, and subject to Meikles Africa Shareholders approving the making of theoffer to Kingdom Shareholders, a Scheme Meeting has been called and is scheduledto take place at 11:00 hours on Tuesday 6 November 2007. 4.2.2.2 Kingdom offer consideration The offer ratio of 17,67 new Meikles Africa shares for every 100 Kingdom sharesheld represents the weighted average ratio of trading prices between the sharesof the two companies as calculated over the 30 and 60 day trading periods up tothe release of the first joint cautionary statement to shareholders on Tuesday31 July 2007. The cash alternative represents the weighted average market priceover the same period. The Boards of Directors of Meikles Africa, and of Kingdomhave received independent advice from the Independent Financial Advisor, Ernst &Young. Ernst & Young is of the opinion that the terms and conditions of theoffer are fair and reasonable to Scheme Members. Taking into account the opinionof the Independent Financial Advisor, the Board of Directors of Kingdom are ofthe unanimous opinion that the terms and conditions of the offer are fair andreasonable to Scheme Members. Accordingly, the directors of Kingdom haverecommended that Kingdom Scheme members vote in favour of the Scheme. Thosedirectors who are shareholders of Kingdom intend to vote in favour of the Schemein respect of the shares in Kingdom owned, directly or indirectly, by them. 4.2.2.3 Kingdom offer voting consideration Approval to make the offer to Kingdom Shareholders is required by way ofOrdinary Resolution at the Meikles Africa EGM, requiring the approval of 50% ofthe Meikles Africa Shareholders present or represented by proxy at the MeiklesAfrica EGM. The major shareholders of Meikles, comprising of ACM Investments(Private) Limited, APWM Investments (Private) Limited, ASH Investments (Private)Limited, JRTM Investments (Private) Limited and FPS Investments (Private)Limited collectively represent 55,5% of the shareholding of Meikles Africa.These parties are considered by the ZSE to be motivators of the ProposedTransaction, and the ZSE has requested their exclusion from voting. These majorshareholders will therefore not participate in voting on this Resolution in theMeikles Africa EGM. Meikles Africa is a 32,9% shareholder in Kingdom and intends voting in favour ofthe Kingdom Scheme. Furthermore, major shareholders representing a further 45%of the issued share capital of Kingdom have indicated that they intend to votein favour of the Kingdom Scheme. 4.2.2.4 Termination of the Kingdom listing on the ZSE The ZSE has, subject to the fulfilment of the Conditions Precedent, as detailedin Paragraph 8 of this Announcement granted approval for the termination of thelisting of Kingdom shares on the ZSE. 4.2.3 Offer to Tanganda Shareholders 4.2.3.1 Mechanics of the Tanganda Offer Meikles Africa currently does not hold any shares in Tanganda, and the offer istherefore for 100% of Tanganda's share capital. Pursuant to this, MeiklesAfrica is offering the shareholders in Tanganda 17,20 new Meikles Africa sharesfor every 100 Tanganda shares held, with a cash alternative of $31 665 perTanganda share held. As a result of this offer, Tanganda has proposed a Schemeof Arrangement between itself and its shareholders under Section 191 of theCompanies Act. To this end, and subject to Meikles Africa Shareholdersapproving the making of the offer to Tanganda Shareholders, a Scheme Meeting hasbeen called and is scheduled to take place at 10:00 hours on Tuesday 6 November2007. 4.2.3.2 Tanganda offer consideration The offer ratio of 17,20 new Meikles Africa shares for every 100 Tanganda sharesheld represents the weighted average ratio of trading prices between the sharesof the two companies as calculated over the 30 and 60 day trading period up tothe release of the first joint cautionary statement to shareholders on Tuesday31 July 2007. The cash alternative represents the weighted average market priceover the same period. ruling market price on the release of the first jointcautionary statement to shareholders on Tuesday 31 July 2007. The Boards ofDirectors of Meikles Africa, and of Tanganda have received independent advicefrom the Independent Financial Advisor, Ernst & Young. Ernst & Young is of theopinion that the terms and conditions of the offer are fair and reasonable toScheme Members. Taking into account the opinion of the Independent FinancialAdvisor, the board of directors of Tanganda are of the unanimous opinion thatthey are fair and reasonable to Scheme Members. Accordingly, the directors ofTanganda have recommended that Tanganda Scheme members vote in favour of theScheme. Those directors, who are shareholders of Tanganda, intend to vote infavour of the Scheme in respect of the shares in Tanganda owned, directly orindirectly, by them. 4.2.3.3 Tanganda offer voting consideration The major shareholders of Meikles Africa, comprising of ACM Investments(Private) Limited, APWM Investments (Private) Limited, ASH Investments (Private)Limited, JRTM Investments (Private) Limited and FPS Investments (Private)Limited collectively represent 55,5% of the shareholding of Meikles Africa and,directly or indirectly, 58,9% of the shareholding of Tanganda. As such, theseparties are considered to be Related Parties, in terms of the ZSE ListingRequirements, and are therefore excluded from voting on the Ordinary Resolutionrelating to Meikles Africa making the offer to the Tanganda Shareholders at theMeikles Africa EGM. The major shareholders of Tanganda, comprising of ACM Investments (Private)Limited, APWM Investments (Private) Limited, ASH Investments (Private) Limited,JRTM Investments (Private) Limited and FPS Investments (Private) Limitedcollectively representing, directly or indirectly, 58,9% of the shareholding ofTanganda intend to vote in favour of the Tanganda Scheme. 4.2.3.4 Termination of the Tanganda listing on the ZSE The ZSE has, subject to the fulfilment of the Conditions Precedent, as detailedin Paragraph 8 of Announcement, granted approval for the termination of thelisting of Tanganda shares on the ZSE. 4.2.4 Offer to Cotton Printers Shareholders 4.2.4.1 Mechanics of the Cotton Printers Offer Meikles Africa currently does not directly hold any of the Cotton Printers sharecapital, and the offer is therefore for 100% of Cotton Printers' share capital.Pursuant to this, Meikles Africa is offering the shareholders in Cotton Printers1 383 330 new Meikles Africa shares for the entire share capital of CottonPrinters. There is no cash alternative for the offer to Cotton Printers. 4.2.4.2 Cotton Printers offer consideration The offer ratio of 1 383 330 new Meikles Africa shares for entire share capitalof Cotton Printers represents the ratio of the weighted average marketcapitalisation of Meikles Africa over the 30 and 60 day trading period up to therelease of the first joint cautionary statement to shareholders on Tuesday 31July 2007, to the Net Asset Value of Cotton Printers, adjusted for valuation ofits property as at 30 July 2007. The Board of Directors of Meikles Africa havereceived independent advice from the Independent Financial Advisor, Ernst &Young. Ernst & Young is of the opinion that the terms and conditions of theoffer are fair and reasonable to Meikles Africa Shareholders. 4.2.4.3 Cotton Printers offer voting consideration The major shareholders of Meikles, comprising of ACM Investments (Private)Limited, APWM Investments (Private) Limited, ASH Investments (Private) Limited,JRTM Investments (Private) Limited and FPS Investments (Private) Limitedcollectively represent 55,5% of the shareholding of Meikles Africa and directlyhold 100% of the share capital of Cotton Printers. As such, these parties areconsidered to be Related Parties, in terms of the ZSE Listing Requirements, andare therefore excluded from voting on the Ordinary Resolution relating toMeikles Africa making the offer to the Cotton Printers Shareholders. The major shareholders of Cotton Printers, comprising of ACM Investments(Private) Limited, APWM Investments (Private) Limited, ASH Investments (Private)Limited, JRTM Investments (Private) Limited and FPS Investments (Private)Limited collectively holding the entire share capital of Cotton Printers intendto accept the Meikles Africa offer, subject to fulfillment of the ConditionsPrecedent, as detailed in Paragraph 8 of this Announcement. 4.3 Adoption Of The Kingdom Meikles Africa Staff Share Purchase Scheme Shareholders are being asked to approve the placing of 24 000 000 (twenty fourmillion) unissued ordinary shares in Meikles Africa, being approximately 10% ofthe anticipated issued share capital, under the control of the Directors whoshall have the authority to issue the shares in tranches to companiesestablished for the purpose of staff share purchase schemes at a price per shareto be determined by the weighted average traded price of Kingdom Meikles Africashares over the thirty (30) days prior to the date of issue. Shareholders arealso being asked to approve the extension of financial assistance by the Companyto enable Approved Participants to participate in the staff share purchaseschemes. 4.4 Revision Of The Articles Of Association Of Meikles Africa Shareholders are being asked to approve the revision of the Articles ofAssociation of Meikles Africa to increase the maximum number of Directors ofMeikles Africa from the existing twelve members, to fifteen members. Anincrease in the number of directors is required to better enable reflection ofthe shareholding interests following implementation of the Proposed Transaction,and future expansion of the group. 4.5 Appointment Of Additional Directors Of Meikles Africa Assuming approval of the Proposed Transaction, and fulfilment of all ConditionsPrecedent, Messrs Nigel Chanakira, Rugare Chidembo, Callisto Jokonya, TawandaNyambirai and Mrs Sibusisiwe Bango will be invited to join the Board of KingdomMeikles Africa Limited. These additions will increase the number of Boardmembers from the existing six, to eleven. 4.6 Name Change As stated earlier in this Circular, it is proposed that the name of the holdingcompany of the Meikles Africa Group be changed from "Meikles Africa Limited" to"Kingdom Meikles Africa Limited". The necessary resolution for the Name Changeappears in the Notice set out at the end of this Announcement. Shareholders will be notified by way of a press announcement once the NameChange has been approved at the EGM, registered with the Registrar of Companies,and approved by the ZSE. 5. EFFECTS OF THE PROPOSED TRANSACTION 5.1 Share Capital 5.1.1 Share capital before the Proposed Transaction Set out below is an analysis of the current authorised and issued share capitalof Meikles Africa before the Proposed Transaction:Share capital details Number of Nominal Value of Ordinary Shares value of Ordinary Ordinary Shares SharesCurrent authorised share capital:Ordinary Shares 200 000 000 $0,0001 $20 000 Current issued and fully paid share capital:Ordinary Shares 164 189 416 $0,0001 $16 418Ordinary Shares under the control of Directors in terms of the Meikles 10 216 118 $0,0001 $1 021Africa staff share purchase scheme Authorised but unissued Ordinary Shares currently under the control of 25 594 466 $0,0001 $2 559Shareholders 5.1.2 Changes in share capital pursuant to implementation of the ProposedTransaction The implementation of the Proposed Transaction will have the following impact onMeikles Africa's share capital: New number of authorised Meikles Africa Shares on increase in authorised share capital 400 000 000Nominal value of Meikles Africa Shares $0,0001Total number of Shares to be issued in terms of the Proposed Transaction, comprising: 78 112 138Number of Shares to be issues to Kingdom Shareholders 56 816 983Number of Shares to be issued to Tanganda Shareholders 19 911 825Number of Shares to be issued to Cotton Printers Shareholders 1 383 330Total number of Shares in issue on implementation of the Proposed Transaction 242 301 554Number of Ordinary Shares under the control of the Directors in terms of the Kingdom Meikles Africa 24 000 000Staff Share Purchase SchemeNumber of Meikles Africa Shares under the control of the Directors 133 698 446 5.1.3 Share capital on implementation of the Proposal Transaction The share capital of Kingdom Meikles Africa on implementation of the ProposedTransaction will comprise the following: Share capital details after the Proposed Transaction Number of Meikles Africa Nominal value of Value of Shares Meikles Africa Meikles Africa Shares SharesAuthorised share capital after the Restructuring:Meikles Africa Shares 400 000 000 $0,0001 $40 000 Issued and fully paid share capital after the Restructuring:Meikles Africa Shares 242 401 554 $0,0001 $24 230Number of Meikles Africa Shares allocated to the Kingdom 24 000 000 $0,0001 $2 400Meikles Africa Staff Share Purchase SchemeAuthorised but unissued Meikles Africa Shares under the 134 698 446 $0,0001 $13 370control of shareholders 5.2 Shareholders 5.2.1 Current shareholding With approximately 1 900 Shareholders, Meikles Africa is a fairly broadly heldcounter. Its largest Shareholders are ACM Investments (Private) Limited, APWMInvestments (Private) Limited, ASH Investments (Private) Limited, JRTMInvestments (Private) Limited and FPS Investments (Private) Limited whocollectively hold 55,5% of Meikles Africa's issued share capital. Old MutualLife Assurance Company of Zimbabwe holds 10,9% of Meikles Africa. As at the Last Practicable Date, Meikles Africa Shareholders holding more than5,00% of the issued share capital of the Company comprised the following: Meikles Africa Shareholder Number of Holding Ordinary SharesJRTM Investments (Private) Limited 18 455 737 11,2%ASH Investments (Private) Limited 18 318 728 11,1%ACM Investments (Private) Limited, 18 215 506 11,1%APWM Investments (Private) Limited 18 215 456 11,1%FPS Investments (Private) Limited 18 215 506 11,1%Old Mutual Life Assurance 17 819 050 10,9% 108 983 265 66,4% 5.2.2 Foreign shareholding Of the 164 189 416 Ordinary Shares currently in issue, Non-resident Shareholdershold 3,0% of the issued ordinary share capital of Meikles Africa. The London Register accounts for 2,8% of the total shareholding. 5.2.3 Impact of the Proposed Transaction on Meikles Africa's shareholding Assuming approval of the Proposed Transaction at the EGM, approval by Kingdomand Tanganda shareholders at their respective Scheme Meetings, and fulfilment ofall Conditions Precedent, existing Meikles Africa Shareholders will be dilutedby the extent of the issue of Meikles Africa shares to existing Kingdom,Tanganda and Cotton Printers shareholders. Assuming full acceptance of theoffers to Kingdom and Tanganda by way of new Meikles Africa shares, the existingmajority shareholders of Meikles Africa, ACM Investments (Private) Limited, APWMInvestments (Private) Limited, ASH Investments (Private) Limited, JRTMInvestments (Private) Limited and FPS Investments (Private) Limited, will hold43,0% of Kingdom Meikles Africa Limited. 5.2.3 Shareholding On Implementation Of The Transaction The following table outlines the anticipated shareholding of Kingdom MeiklesAfrica, assuming implementation of the Proposed Transaction, assuming the SchemeConsiderations are settled in full using Meikles Africa Shares.Shareholder Number of Holding Ordinary Shares (%)JRTM Investments 21 076 513 8,7%Old Mutual Life Assurance 21 022 919 8,7%ASH Investments 20 929 165 8,6%FPS Investments 20 859 018 8,6%ACM Investments 20 839 441 8,6%APWM Investments 20 836 232 8,6%Time Cap Investments 7 704 542 3,2%TS Masiyiwa Holdings 7 624 446 3,1%Fed Nominees 6 278 361 2,6%Valleyfield Investments 5 723 277 2,4%Totals 152 893 914 63,0% 5.3 Financial Effects 5.3.1 Costs of the Proposed Transaction The costs of the transaction which are to be borne by Meikles Africa, whichrelate to specific legal, taxation and financial advisory services, areestimated at approximately $161 billion, and are expected to be met throughexisting resources. A portion or the whole of Imara's fees due with respect toadvisory fees in connection with the Proposed Transaction may be paid by issueof shares under the Directors control. 5.4 Directors The Proposed Transaction incorporates both an increase in the maximum number ofDirectors in terms of the Articles of Association, and appointment of a furtherfive Board members in addition to the existing six Board members. Theseprovisions make allowance for both the broader spread of shareholder interestsand business activities pursuant to the Proposed Transaction, as well as makingprovision for future business growth. 5.5 Management The Proposed Transaction will see Mr Nigel Chanakira assume the position ofChief Executive Officer of Kingdom Meikles Africa. Kingdom, Tanganda and CottonPrinters will remain distinct businesses, and the management of these businessesis expected to remain largely unchanged in the immediate future. Details of keymanagement are laid out in the full Circular to shareholders. 5.6 Staff Share Purchase Scheme There are currently 10 216 118 Ordinary Shares available to qualifying employeesin terms of the existing Meikles Africa staff share purchase scheme. Pursuant to the Proposed Transaction, 24 000 000 Kingdom Meikles Africa Shareswill be placed under the control of the Directors of Kingdom Meikles Africa forallocation under the Kingdom Meikles Africa Staff Share Purchase Scheme. Thisscheme replaces the existing schemes. 5.7 Financial Impact • Pro-forma historical and inflation adjusted financial information on Kingdom Meikles Africa for the twelve months ended 31 March 2007 is set out below. KINGDOM MEIKLES AFRICA LIMITEDPRO-FORMA CONSOLIDATED INCOME STATEMENTFOR THE YEAR ENDED 31 MARCH 2007 INFLATION ADJUSTED HISTORICAL COST 2007 2007 $m $mRevenue 1,017,720 396,937 Cost of sales (810,593) (205,339) Gross profit 207,127 191,598Interest income - Kingdom 309,777 94,542Interest expense - Kingdom (104,439) (36,052)Net interest income 205,338 58,490 Total Gross profit and net interest 412,465 250,088Dealing profits 86,347 53,044Other income 52,726 24,768Employee costs (139,670) (52,295)Occupancy costs (31,635) (12,609)Other operating costs (96,093) (18,408)Impairment loss on loans and advances (2,076) (1,738)Provision for loss on litigation (8,753)) (1,284 Operating profit before monetary adjustment and 273,311 241,566exchange gains Net monetary gain from operating activities (42,384) -Exchange gains on net current assets 238,077 234,743 Operating profit 469,004 476,309 Investment revenue 15,018 11,125Finance costs (15,629) (5,636)Exchange gains on funds earmarked for future 333,290 409,628investmentsNet exchange gains on foreign funds 517,295 608,182Increase in value of quoted investment 133,042 147,537Net monetary gain from financing activities 81,210 -Share of profits of associates 1,092 632 Profit before tax 1,534,322 1,647,777 Income tax expense (268,574) (255,987) Profit for the year 1,265,748 1,391,790 Attributable to:Equity holders of the parent 1,257,244 1,382,628Minority interest 8,504 9,162 1,265,748 1,391,790 Basic earnings per share ($) 4,763 5,237 KINGDOM MEIKLES AFRICA LIMITEDPRO-FORMA CONSOLIDATED BALANCE SHEETAT 31 MARCH 2007 INFLATION HISTORICAL ADJUSTED COST 2007 2007 $m $m Non-current assetsProperty, plant and equipment 641,563 504,315Investment property 8,298 10,370Biological assets 18,509 169Investment in associates 14,902 10,890Other financial assets 711,771 700,433Goodwill 1,525,301 1,558,997Other intangible assets 392 - 2,920,736 2,785,174 Current assetsInventories 169,769 146,870Trade and other receivables 226,833 220,434Customers liability for acceptances 16,988 16,988Cash and cash equivalents 1,537,404 1,537,404 1,950,994 1,921,696 Total assets 4,871,730 4,706,870 Capital and reservesIssued capital 1,927 -Share premium 2,547,162 2,246,534Other non-distributable reserves 168,914 169,861Retained earnings 1,078,908 1,267,253Equity attributable to equity holders of the parent 3,796,911 3,683,648Minority interest 15,708 8,938Total equity 3,812,619 3,692,586 Non-current liabilitiesBorrowings 64,087 64,087Deferred tax 263,766 218,939Other financial liabilities 210,292 210,292 538,145 493,318 Current liabilitiesTrade and other payables 218,161 218,161Customer deposits 74,625 74,625Borrowings 24,038 24,038Other financial liabilities 204,142 204,142 520,966 520,966 Total liabilities 1,059,111 1,014,284 Total equity and liabilities 4,871,730 4,706,870 6. FUTURE PROSPECTS 6.1 OVERVIEW Assuming fulfilment of the Conditions Precedent, the Proposed Transaction willsee the enlarged group being one of the largest companies in Zimbabwe. Theconglomerate's business interests will include premier hotels, the largestsupermarket chain in the country, the only department stores in Zimbabwe,operations in a wide range of financial services and operations in theagricultural sector and textile sectors. 6.2 LOCAL MARKET In the local market the enlarged group will attain critical mass to generategrowth in each of the entities and ensure greater efficiency in the utilisationof resources in the form of group assets and human capital. Each entity will bein a position to leverage off opportunities created from synergies and assets ofother entities in the group. Kingdom will have enhanced access to markets toincrease its retail deposit base and more closely align branches to MeiklesRetail Division. Tanganda, Meikles Africa Hotels and Cotton Printers generateforeign currency from their local operations, which will be available forchanneling into their, and other, parts of the group to fund capital projectsand to assist in stock replacement and operational maintenance. The new groupwill be in a position to more effectively manage treasury administration andcustomer and supplier relationships. In addition, there will be a greater assetbase to provide a foundation for the group to implement expansion plans in eachof the entities. Plans are advancing for major expansion at Victoria FallsHotel and the refurbishing of both Zimbabwe hotel operations. Collectiveutilisation of the enlarged asset base will provide opportunities to increasegroup shareholder value greater than the sum of existing parts. 6.3 REGIONAL GROWTH AND PROSPECTS Regional growth in the initial stages of the new group will be focused on thehospitality sector and potential expansion of Kingdom. In the hospitalitysector, plans are advancing for major investment in conservancy and safarioperations leveraging off existing market relationships with Cape Grace Hoteland Victoria Falls Hotel. The tourist market in South Africa indicates growth,beyond that merely associated with the 2010 World Cup Football. Kingdom is looking to extend its operations into the region by using localexperience and skills together with those from its businesses in Botswana andMalawi. The greater export drive from Tanganda and Cotton Printers will provide a basefor possible expansion of their businesses into the region. 7. DIVIDENDS Meikles Africa's historic dividend policy has been 3 to 3,5 times cover ofoperating cash flows. However such policy is reviewed from time to time to takeinto account various economic and operating factors. Dividends are payable whenthe directors of the company deem it fit to do so. 8. CONDITIONS PRECEDENT The Proposed Transaction is subject to the following approvals: • Shareholder approval by the requisite majorities at the EGM, on the terms and conditions and subject to the voting exclusions stated herein, for the Proposed Transaction, the adoption of the Kingdom Meikles Africa Staff Share Purchase Scheme, adoption of the revised Articles of Association, the appointment of five additional Directors to the Board and the Name Change, as well as for the placing of the balance of the authorised but unissued Meikles Africa Shares under the Directors' control on implementation of the Transaction; • Registration of the Special Resolution relating to the increase in authorised share capital by the Registrar of Companies pursuant to the Restructuring; • Approval of the Kingdom Scheme of Arrangement by a majority representing not less than three-fourths of the votes exercisable by the Kingdom Scheme Members present and voting either in person or by proxy at the Scheme Meeting; • Approval of the Tanganda Scheme of Arrangement by a majority representing not less than three-fourths of the votes exercisable by the Tanganda Scheme Members present and voting either in person or by proxy at that Scheme Meeting; • Both Schemes being sanctioned by the Court; • Approval from the Registrar of Banks relating to the revised shareholding structure with regard to Kingdom. 9. REGULATORY ISSUES ZIMRA has provided its written approval for the transfer of Tanganda and CottonPrinters pursuant to the Proposed Transaction to be considered as part of ascheme of reorganisation for capital gains tax purposes in terms of Section 15(1)(b) of the Capital Gains Tax Act in terms of a letter dated 14 September2007. As a result no capital gains tax will be payable by shareholders ofTanganda or Cotton Printers pursuant to the Proposed Transaction. In the case of Kingdom, ZIMRA ruled that the transfer of Kingdom shares pursuantto the Proposed Transaction cannot be considered as part of a scheme ofreorganisation for capital gains tax purposes in terms of Section 15(1)(b) ofthe Capital Gains Tax Act. The Company is exploring alternative means throughwhich it can mitigate the full impact of the potential tax liabilities arisingout of the Proposed Transaction. In the event of capital gains tax arising inthe hands of Kingdom shareholders pursuant to the Proposed Transaction, suchliability will be met by KMAL. The Registrar of Banks is considering the revised shareholding structure withregard to Kingdom. The Directors are of the view that the revised shareholdingstructure complies with the Registrar of Banks' regulations and will beapproved. The Competition and Tariff Commission has been notified of the ProposedTransaction. In terms of a letter dated 9 October the Competition and TariffCommission has given its approval for the public notices to be published and forthe Circular to be distributed to shareholders while they are completinganalysis of the application for the merger of the four businesses. The Exchange Control authorities have approved the application on behalf ofNon-resident Shareholders of Kingdom and Tanganda to receive new Meikles Africashares with the equivalent status in terms of an approval dated 7 September2007. Meikles Africa, Kingdom, Tanganda and Cotton Printers acknowledge the recentpassing through the Parliament of Zimbabwe of the Economic Empowerment Bill.Assuming fulfillment of the Conditions Precedent, the Proposed Transaction willresult in the resulting Kingdom Meikles Africa meeting the provisions of thisBill. 10. MEIKLES AFRICA EGM In terms of ZSE Listing Requirements, the major shareholders are precluded fromvoting on the Resolutions relating to the offers to shareholders of bothTanganda (Resolution 2) and Cotton Printers (Resolution 3). Furthermore, asmotivators of the merger with Kingdom, the ZSE has requested their exclusionfrom voting on Resolution 1, regarding the offer to Kingdom. The MajorShareholders accordingly do not intend to and will not vote in regard to thoseResolutions. Subject to the aforementioned voting exclusions relating to the majorshareholders, the support of Meikles Africa Shareholders is being sought for theResolutions at the EGM, on the terms and conditions set out herein. In this regard, approval is being sought specifically for the ProposedTransaction, the adoption of the Revised Articles, the adoption of the KingdomMeikles Africa Staff Share Purchase Scheme, the adoption of the revised Articlesof Association, the appointment of five additional Directors to the Board andthe name change, as well as for the placing of the balance of the authorised butunissued Meikles Africa Shares under the Directors' control on implementation ofthe Transaction. Set out at the end of this Announcement is the Notice which contains details ofthe Resolutions and convenes the EGM, to be held at 9:00 hours on Tuesday 6November 2007 in the Mirabelle Room, Meikles Hotel, 3rd Street, Harare, at whichtime the Resolutions will be proposed for approval by Shareholders, eitherpresent in person or by proxy in terms of Section 129(3) of the Companies Act. 11. STATUTORY INFORMATION IN RESPECT OF THE PROPOSED TRANSACTION In addition to the details already covered in this Announcement, the statutoryand regulatory information supplied hereunder is provided in accordance with ZSEListing Requirements. 11.1 VOTING RIGHTS All holders of Ordinary Shares entitled to vote will be entitled to attend andvote at the EGM in accordance with the Company's Existing Articles. In terms of Section 129(3) of the Companies Act, a member entitled to attend theEGM may appoint one or more proxies, in the alternative, who need not be amember(s) of the Company, to attend, speak and vote on his behalf, includingvoting on a poll. 11.2 DIRECTORS Statutory information concerning the Directors of Meikles Africa is set outhereunder. 11.2.1 Details of Directors The requisite details pertaining to the current Directors of Meikles Africa areas follows: Name of Meikles Africa Age Nationality Physical address Meikles Africa role/positionDirector John Ralph Thomas Moxon 63 Zimbabwean Brandfold, Piers Road, Borrowdale, Non-executive Chairman HarareMuchadeyi Masunda 55 Zimbabwean 17 Harare Drive, Chisipite, Harare Non-executive DirectorDavid William Mills 59 Zimbabwean 23 Shottery Road, Greystone Park, Executive Director - Retail HarareDennis Edward Stephens 69 Zimbabwean 252 Fairway Crescent, Borrowdale Non-executive Director Brooke, HarareMichael Stuart Wilson 67 British 22 Crescent Grove, London, SW4 7AH, UK Non-executive DirectorCecil Bryan Thorn 56 Zimbabwean 8 Breach Road, Borrowdale, Harare Executive Director - Finance and Administration 11.2.2 Directors' Interests 11.2.2.1 Interests in Ordinary Shares As at the Last Practicable Date, the direct and indirect interests of theDirectors of Meikles Africa and their immediate families in Ordinary Shares wereas follows: Name of Meikles Number of Ordinary Shares held directly Number of Ordinary Shares held indirectlyAfrica Director Last Practicable Date 31 March 2007* Last Practicable Date 31 March 2007*J.R.T. Moxon 60 674 60 500 2 469 795 2 242 322M. Masunda 0 0 0 0D. W. Mills 6 017 6 000 392 620 281 039D.E. Stephens 20 057 20 000 564 080 449 513M.S. Wilson 41 900 50 000 0 0C.B. Thorn 0 0 108 770 1 000Totals 128 648 136 500 3 535 265 2 973 874 Note: * Being the date of last publication of Directors' Interests. 11.2.2.2 Other interests Save as disclosed above, neither the Directors of Meikles Africa nor any memberof their immediate families nor any person acting in concert with Meikles Africacontrols or is interested, beneficially or otherwise, in any Ordinary Shares orin any securities convertible to rights to subscribe for Ordinary Shares. 11.2.3 Directors' service contracts and remuneration During the financial period ended 31 March 2007, Directors' fees amounted to anaggregate amount of $332 million. Given the appointment of five additional Directors pursuant to implementation ofthe Transaction, remuneration will be reviewed from time to time. 11.3 CORPORATE GOVERNANCE Meikles Africa's Board currently comprises a total of six (6) members, two ofwhom are executive Directors. The Board broadly applies the principles of the Combined Code of CorporateGovernance. The Board meets regularly, and is responsible for the proper management of theMeikles Africa Group and setting of the strategic direction of the Group. J. R.T. Moxon chairs the Board of Directors. The Board has indicated its full support for the Proposed Transaction. The Directors' declarations in support of the Proposed Transaction are set outin "Opinions, voting recommendations and voting exclusions", being paragraph 15to this Announcement. 12. DIRECTORS' DECLARATIONS 12.1 STATEMENT OF INDEBTEDNESS 12.1.1 Authorisation In terms of the Meikles Africa Articles the Directors shall not allow theborrowings of Meikles Africa to exceed at any time, twice the value of the fundsattributable to the shareholders. The level of borrowings of Meikles Africa as at 11 October 2007 did not exceedthe limit set in terms of Meikles Africa's Articles. 12.1.2 Solvency, liquidity and working capital statement The Directors are of the opinion that both the issued share capital and theworking capital of Kingdom Meikles Africa will provide sufficient availablefinancial resources for Kingdom Meikles Africa's foreseeable working capitalrequirements. 12.2 LITIGATION Neither Meikles Africa nor any of its subsidiaries is involved in any materiallitigation, dispute or arbitration proceedings which may have, or have had inthe past 12 months preceding the date of this Document, a significant effect onthe financial position of Meikles Africa, nor is Meikles Africa aware that anysuch litigation, dispute or arbitration proceedings are pending or threatened. 12.3 SIGNIFICANT CONTRACTS Meikles Africa underwrote the Kingdom rights issue in 2006. Apart from this,Meikles Africa and its subsidiaries have not entered into any significantcontracts, other than in the normal course of business, during the past twoyears. 12.4 MATERIAL CHANGES AND COMMISSIONS Save as discussed in this Document, between 31 March 2007 and the date of thisDocument, there have been no material adverse changes in Meikles Africa'sfinancial position, and no commissions, brokerages, discounts or other specialterms have been granted by Meikles Africa in connection with the issue or saleof any of its share capital. 13. EXPERTS' AND OTHER CONSENTS Imara Corporate Finance, Renaissance, Deloitte and Touche, Ernst & Young, GGG,have given and not withdrawn their consents to the issue of this Document withthe inclusion of their names and reports in the forms and contexts in which theyappear. 14. DOCUMENTS AVAILABLE FOR INSPECTION The following documents, or copies thereof, will be available for inspection atthe registered office of Meikles Africa, as well as at the offices of ImaraCorporate Finance situated in Harare at 1st Floor, Block 2 Tendeseka OfficePark, Samora Machel Avenue, Eastlea, Harare and in Bulawayo at Farnum House,Leopold Takawira Street, Bulawayo, during normal business hours, on weekdays,until Tuesday 6 November 2007: • Audited financial statements of Meikles Africa for the three financial years ended 31 March 2007; • The Accountants' Report on Meikles Africa; • The Independent Financial Advisor's Report; • The significant contracts referred to in paragraph 12.3 of this Announcement; and • The experts' and other consents referred to in paragraph 13 of this Announcement. • Signed undertakings of support for the Proposed Transaction as outlined in Paragraph 4.2.2.3 and 4.2.3.3 of this Announcement 15. OPINIONS, VOTING RECOMMENDATIONS AND VOTING EXCLUSIONS Ernst & Young, which was appointed to provide independent advice to MeiklesAfrica shareholders has considered the terms and conditions of the ProposedTransaction and is of the opinion that the terms and conditions thereof are fairand reasonable in the circumstances and in the best interests of Meikles Africaand its Shareholders. The Directors consider the Proposed Transaction to be fair and reasonable in sofar as Meikles Africa Shareholders are concerned and to be in the best interestsof Meikles Africa. The Directors unanimously recommend that Shareholders vote in favour of theResolutions at the EGM to give effect to the Proposed Transaction as theDirectors intend to do in respect of their respective shareholdings. As stated previously, major shareholders, holding between them 55,5% of theissued share capital of Meikles Africa, have confirmed their support for theProposed Transaction by way of irrevocable undertakings filed with the CompanySecretary. This support is subject to the provisions of ZSE ListingRequirements, which preclude the Major Shareholders as related parties fromvoting on the Resolutions concerning the Proposed Transaction (Resolutions 2 and3). In the circumstances, the Major Shareholders accordingly do not intend toand will not vote on these Resolutions. Yours faithfully J. R. T. MoxonChairman PART 2: ANCILLARY INFORMATION 1. DELIVERY/COLLECTION OF THE CIRCULAR TO SHAREHOLDERS Shareholders are advised that although the Circular to Shareholders will be sentout to all holders of Meikles Ordinary Shares, registered as such at close ofbusiness on 16 October 2007, Shareholders may also contact the transfersecretaries, Thomas Meikle Centre (Private) Limited, regarding the Circular andfrom any of the persons mentioned in the Annexure to this notice. 2. QUERIES If you have any questions on any aspects of this notice or the Circular, pleasecontact your stockbroker, accountant, banker, legal practitioner or otherprofessional advisor, or Sean Gammon at Imara Corporate Finance Zimbabwe(Private) Limited, Block 2, Tendeseka Office Park, Samora Machel Avenue,Eastlea, Harare, Zimbabwe; Telephone number +263 4 701320; Fax +263 4 701319;E-mail: [email protected]. BY ORDER OF THE BOARD Company Secretary and Registered Office: Transfer Secretaries:A. Lane Mitchell Thomas Meikle Centre99 Jason Moyo Avenue 99 Jason Moyo Avenue(PO Box 3598) (PO Box 3598)Harare Harare BY ORDER OF THE BOARD 16 October 2007 Shareholders are advised that the Circular will be posted from 16 October 2007.In the event that there are any delays in receiving the Circular, Shareholdersmay contact the Thomas Meikle Centre or any of the advisors whose names aregiven below regarding the Circular at the addresses detailed below. Shareholders may also collect the Circular from Thomas Meikles Centre and anyone of the following places: Thomas Meikle Centre Renaissance Securities (Private) Limited6th Floor 99 Jason Moyo Avenue Members of the Zimbabwe Stock Exchange99 Jason Moyo Avenue 2nd Floor, Social Security Centre(PO Box 3598) ParklaneHarare (PO Box 1244) HarareImara Corporate Finance Zimbabwe (Private) Limited Imara Corporate Finance Zimbabwe (Private) LimitedBlock 2, Tendeseka Office Park 4 Fanum HouseSamora Machel Avenue Cnr Leopold Takawira/J. Tongogara StreetsEastlea PO Box 524(PO Box 1475) BulawayoHarare MEIKLES AFRICA LIMITED (Incorporated in Zimbabwe in 1937 under company registration number 1/37) ("Meikles Africa" or "Company") Directors: J. R. T. Moxon, D. Mills*, M. Masunda, D. E. Stephens, C. B. Thorn*, M. S. Wilson *Executive Director Address: 99 Jason Moyo Avenue, (PO Box 3598), Harare. NOTICE OF EXTRAORDINARY GENERAL MEETING ("EGM") In terms of the Company's existing Memorandum and Articles of Association ("Existing Memorandum and Articles"), notice ("Notice") is hereby given that anEGM of shareholders of Meikles Africa ("Meikles Africa Shareholders") will beheld in the Mirabelle Room, Meikles Hotel, 3rd Street, Harare, at 09:00 hours onTuesday 6 November 2007, to consider, and, if deemed fit, to pass, with orwithout modification, the following special and ordinary Resolutions: 1. AS AN ORDINARY RESOLUTION - ACQUISITION OF THE ENTIRE ISSUED SHARE CAPITALOF KINGDOM FINANCIAL HOLDINGS LIMITED Subject to approval of resolution 4 below: "THAT, the merger of Meikles Africa and Kingdom Financial Holdings Limited ("Kingdom") to be effected through an offer ("Kingdom Offer") by Meikles Africa toacquire the balance of the issued share capital of Kingdom not already held inconsideration of the issue of shares by Meikles Africa or purchase for cash uponthe terms and subject to the conditions set out in the Document dated 16 October2007 be and is hereby approved and the Directors of Meikles Africa (or any dulyauthorised committee thereof) be and they are hereby authorised to amend or varythe terms and conditions of such Kingdom Offer (provided that no such amendmentor variation shall be material in the context of the Kingdom Offer) and to doall such things as they may consider necessary or desirable to give effect to orin pursuant to or in connection with the Kingdom Offer. The major shareholders of Meikles, comprising of ACM Investments (Private)Limited, APWM Investments (Private) Limited, ASH Investments (Private) Limited,JRTM Investments (Private) Limited and FPS Investments (Private) Limitedcollectively represent 55,5% of the shareholding of Meikles Africa. Theseparties are considered by the ZSE to be motivators of the Proposed Transaction,and the ZSE has requested their exclusion from voting. These major shareholderswill therefore not participate in voting on this Resolution in the Meikles EGM. 2. AS AN ORDINARY RESOLUTION: ACQUISITION OF THE ENTIRE ISSUED SHARE CAPITALOF TANGANDA TEA COMPANY LIMITED Subject to approval of resolution 4 below: "THAT, the merger of Meikles Africa and Tanganda Tea Company Limited ("Tanganda") to be effected through an offer ("Tanganda Offer") by Meikles Africa to acquire the balance of the issued share capital of Tanganda inconsideration of the issue of shares by Meikles Africa or purchase for cash uponthe terms and subject to the conditions set out in the Document dated 16 October2007 be and is hereby approved and the Directors of Meikles Africa (or any dulyauthorised committee thereof) be and they are hereby authorised to amend or varythe terms and conditions of such Tanganda Offer (provided that no such amendmentor variation shall be material in the context of the Tanganda Offer) and to doall such things as they may consider necessary or desirable to give effect to orin pursuant to or in connection with the Tanganda Offer. The major shareholders of Meikles, comprising of ACM Investments (Private)Limited, APWM Investments (Private) Limited, ASH Investments (Private) Limited,JRTM Investments (Private) Limited and FPS Investments (Private) Limitedcollectively represent 55,5% of the shareholding of Meikles Africa and, directlyor indirectly, 58,43% of the shareholding of Tanganda. As such, these partiesare considered to be Related Parties, in terms of the ZSE Listing Requirements,and are therefore excluded from voting on the Ordinary Resolution relating toMeikles Africa making the offer to the Tanganda Shareholders at the Meikles EGM. 3. AS AN ORDINARY RESOLUTION: ACQUISITION OF THE ENTIRE ISSUED SHARE CAPITALOF COTTON PRINTERS (PRIVATE) LIMITED Subject to approval of resolution 4 below: "THAT, the merger of Meikles Africa and Cotton Printers (Private) Limited ("Cotton Printers") to be effected through an offer ("Cotton Printers Offer") byMeikles Africa to acquire the balance of the issued share capital of CottonPrinters in consideration of the issue of shares by Meikles Africa upon theterms and subject to the conditions set out in the Document dated 16 October2007 be and is hereby approved and the Directors of Meikles Africa (or any dulyauthorised committee thereof) be and they are hereby authorised to amend or varythe terms and conditions of such Cotton Printers Offer (provided that no suchamendment or variation shall be material in the context of the Cotton PrintersOffer) and to do all such things as they may consider necessary or desirable togive effect to or in pursuant to or in connection with the Cotton PrintersOffer. The major shareholders of Meikles, comprising of ACM Investments (Private)Limited, APWM Investments (Private) Limited, ASH Investments (Private) Limited,JRTM Investments (Private) Limited and FPS Investments (Private) Limitedcollectively represent 55,5% of the shareholding of Meikles Africa and directlyhold 100% of the share capital of Cotton Printers. As such, these parties areconsidered to the Related Parties, in terms of the ZSE Listing Requirements, andare therefore excluded from voting on the Ordinary Resolution relating toMeikles Africa making the offer to the Cotton Printers Shareholders. 4. AS A SPECIAL RESOLUTION: RESTATEMENT OF THE COMPANY'S SHARE CAPITAL "THAT, in terms of the Company's Memorandum and Articles, the authorised sharecapital of the Company of $20 000.00 (twenty thousand dollars) divided into 200000 000 (two hundred million) ordinary shares of $0.0001 (one hundredth of acent) be and is hereby increased, from 200 000 000 (two hundred million)ordinary shares of a nominal value of $0,0001 (one hundredth of a cent) pershare ("Ordinary Shares") to 400 000 000 (four hundred million) ordinary sharesof a nominal value of $0,0001 (one hundredth of a cent) per share ("MeiklesAfrica Shares")." 5. AS A SPECIAL RESOLUTION: APPROVAL FOR THE KINGDOM MEIKLES AFRICA STAFFSHARE PURCHASE SCHEME "THAT, 24 000 000 unissued shares of the Company be placed under the control ofthe Directors who shall have the authority to issue the shares to companiesestablished for the purpose of Staff Share Purchase schemes, on such terms andconditions as they deem fit, provided that the shares shall be issued t a pricecalculated on the basis of the weighted average price of the Company's sharesover the thirty (30) days prior to the date of issue, and that the companyprovide financial assistance to the approved participants of such SharePurchase Scheme by providing loans on terms and conditions approved by theCompany's Non-Executive Directors. 6. AS A SPECIAL RESOLUTION: AMENDMENT OF ARTICLES OF ASSOCIATION ""THAT Article 87 of the Company's Articles of Association be deleted in itsentirety and that the following article (i) be substituted: "87 (i) Until and otherwise determined from time to time by shareholders inGeneral Meeting the number of Directors shall be no less than four (4) and nomore than fifteen (15)." 7. AS AN ORDINARY RESOLUTION: APPOINTMENTS OF FIVE ADDITIONAL DIRECTORS OFMEIKLES AFRICA AS A SINGLE RESOLUTION Subject to approval of resolutions 1 to 6 above: "THAT the appointments of five additional Directors to the board of Directors ofthe Company be and is hereby approved, which approvals be and are hereby movedin a single resolution." 8. AS AN ORDINARY RESOLUTION: APPOINTMENT OF MESSRS NIGEL CHANAKIRA, RUGARECHIDEMBO, CALLISTO JOKONYA, TAWANDA NYAMBIRAI AND MRS SIBUSISIWE BANGO ASDIRECTORS OF MEIKLES AFRICA Subject to approval of resolution 7 above: "THAT the appointments of Messrs Nigel Chanakira, Rugare Chidembo, CallistoJokonya, Tawanda Nyambirai and Mrs Sibusisiwe Bango as Directors of the Companybe and are hereby approved." 9. AS A SPECIAL RESOLUTION: NAME CHANGE Subject to approval of Resolutions 1 to 5 above and registration of Resolution 5with the Registrar of Companies: "THAT, with effect from the day after the listing of the new Meikles AfricaShares on the ZSE, pursuant to completion of the Offers, the name of the Companybe and is hereby changed from "Meikles Africa Limited" to "Kingdom MeiklesAfrica Limited"." 10. AS AN ORDINARY RESOLUTION: UNISSUED SHARE CAPITAL "THAT, although no issue of these shares is contemplated at the present time,the balance of the authorised but unissued share capital of the Company afterthe Proposed Transaction, and establishment of the Kingdom Meikles Staff SharePurchase Scheme, be and are hereby placed under the control of the Directors foran indefinite period, to be dealt with in terms of the Company's Articles andthe regulations of the ZSE, provided that no issue will be made which wouldeffectively transfer the control of the Company without the prior approval ofKingdom Meikles Africa Shareholders in general meeting." BY ORDER OF THE BOARD Company Secretary and Registered Office: Transfer Secretaries:A. Lane Mitchell Thomas Meikle Centre99 Jason Moyo Avenue 99 Jason Moyo Avenue(PO Box 3598) (PO Box 3598)Harare Harare 16 October 2007 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Meikles