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Recapitalisation a return to core business’

Staff Writer

MASHONALAND Holdings Ltd (Masholds’) recapitalisation through its rights issue and acquisition of properties represents a return to core activity, according to company chair

man Godfrey Gomwe.

The chairman, who also sits on the board of mining giant Anglo American Corporation, says over the years the group expanded into construction materials – bricks, cement, sand, manufacturing and distribution in the engineering and electrical sectors and property development at Ruwa.

“At the height of its activities during the 1990s it operated three large separate sectors – construction, industrial and trading,” Gomwe said.

“During this time the decision was taken to unlock shareholder value into more logically defined business units. The age of the multi-faceted conglomerate was drawing to a close.”

Masholds recently raised eyebrows in the market when it revealed that it would go on a $32 billion shopping spree to snap up major buildings at a time when its resources were scarce.

Businessman Gomwe turned around the company, which at one stage was the worst performing on the Zimbabwe Stock Exchange (ZSE).

According to the list of properties to be acquired at “open market” values as at September 1 as determined by leading independent property valuers Knight Frank, Masholds will have to fork out $31,8 billion for 14 upmarket properties and stands spread countrywide.

The properties include the prestigious Intermarket Life Towers ($11,5 billion), Charter House ($3,65 billion), Chiyedza House ($4,79 billion) and West End Clinic ($1,1 billion).

Gomwe said the group steadily concentrated on its core business and offloaded departments that did not add value.

“The last 18 months have seen the rightsizing of the old Mash and the initial preparations for the new Mash,” Gomwe said. “As you will doubtless be aware not only from the circular to shareholders but also from the recent extensive press publicity the new Mash represents an amalgamation of properties, skills and resources from Anglo American, Intermarket Holdings Ltd, CB Richard Ellis and our other many shareholders and stakeholders.”

He said shareholders representing some 85% of the company unanimously approved the resolutions placed before them at the EGM on October 30 thereby bringing to reality the new, expanded property company.

“Today we look to the future with confidence, even against the current background of economic and political uncertainty,” Gomwe said.

“Our initial property portfolio encompasses some of Harare’s most prestigious commercial complexes not to mention a mix of industrial and residential stands which are ready for development.”

He said the new share would reward investors with a sound hedge against inflation.

“Time and again the experience of hyperinflationary economies has shown that property investments have best withstood such inflationary pressures thereby maintaining, if not enhancing, the value of the initial investment,” he said.

Gomwe said he believed the new company would provide a sound investment base for many smaller institutions, companies and individuals who had long wanted to balance their equity portfolios with a property investment, but which had hitherto been unavailable on the stock exchange.

Masholds shares were yesterday trading at $55.

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