KFHL’s Wall Street Dream Lives on — Chanakira

NIGEL Chanakira, one of the chief protagonists in the Kingdom Meikles Limited (KML) saga, says the demerger of the conglomerate will not affect Kingdom Financial Holdings Limited’s (KFHL) dream: listing on Wall Street.

To him, Wall Street is the final destination as the brand will compete with the best in the world.

In his first interview after KML agreed to demerge, Chanakira says the Wall Street dream is still on despite the problems that resulted in the divorce of the KML conglomerate.

“Nothing has changed and we still remain committed to eventually listing on Wall Street. Like any major development, it is a process,” he said adding that KFHL is considering a listing on the JSE’s Africa Board.

“While the recent challenges were unfortunate, Kingdom remains a strong brand, has a competent management team and staff and is confident of taking advantage of existing and emerging market opportunities in Zimbabwe and beyond to expand the business.”

KML — formed in 2007 after the merger of Meikles Africa, KFHL, Tanganda and Cotton Printers — is set to demerger after irreconcilable differences between then chairman and chief executive officer, John Moxon and Chanakira.

In September, the feuding parties agreed to divorce and they are working on modalities on how the process could be achieved.

As part of the deal, Chanakira will swap his 6% in KML with Moxon’s 18% shareholding in KFHL. Chanakira or his associates will buy Moxon’s remaining 25% stake over a two-year period and the transaction is on condition that Moxon is despecified.

In addition, the warring parties are negotiating how the US$22,5 million Meikles advanced to KFHL subsidiaries to meet the central bank capital requirements could be repaid.

Chanakira said extensive discussions have been held on fulfilling the conditions of the demerger of KML, and “we are satisfied with the agreements already reached”.

“There are a few outstanding issues relating to the demerger but we are on course to resolving them satisfactorily,” he said.

The problems at KML will spill over to KFHL and it will struggle against other players, pundits say.

However, Chanakira says the group has the muscle to withstand the heat in the financial services sector.
Chanakira says the current restructuring of the group is being done “to ensure its competitiveness in the local market and also in the region where it is exploring expansion initiatives”.

The restructuring and rationalisation is to align the business models to the current economic and market environment, Chanakira says.

As part of the restructuring exercise, the group offered its staff at all levels the opportunity to leave under a voluntary separation package.

Under this scheme, 183 employees, including senior managers, have left the group.

“The restructuring has presented Kingdom with the opportunity to position the brand to expand locally and in the region. In particular, we wanted to right-size the group by cutting on operational costs, focus on improving efficiencies and further enhancing customer service. We believe that a new dawn is being ushered following the announced demerger of the group from Kingdom Meikles Africa Limited and this has given us the impetus to usher in a new era, rejuvenate our brand and take our renowned customer service and product innovativeness to a greater, new and unsurpassed level,” he said.

Was it worthwhile to go into the merger in the first place?

“The strategic and business rationale of the merger was fully explained when the merger was mooted. It is unfortunate however that the group has been demerged and we wish our colleagues at Meikles all the best for the future. The merger was not therefore an exercise in futility,” he said.

There are lessons learnt from the collapsed marriage but Chanakira says the appropriate time will come when he would be at liberty to discuss the matter “but I can say we were for the first time able to understand firsthand how a supermarket chain operates, and how to manage such a business particularly in the extremely challenging economic environment that we have faced in Zimbabwe.

“Such lessons will prove invaluable as we expand our group,” he said.

Chanakira controlled KFHL with the support of Meikles and Econet but in the new dispensation he says “adequate measures have been put in place to ensure that Kingdom is firmly on the control of its shareholders again”.  — Staff Writer.

Top