Tiger Brands, the second largest shareholder in National Foods Holdings Ltd (Natfoods), is battling to get its share of a US$4 million full-year dividend declared by the group’s board of directors as the country’s cash and settlement problems stemming from severely depleted nostro balances take a toll on the economy, businessdigest has established.
By Chris Muronzi
Tiger Brands Ltd, a Top 40 Johannesburg Stock Exchange-listed company, whose footprint extends across the African continent and beyond, owns 37,5% of Natfoods valued at US$89,7 million at yesterday’s market capitalisation, the largest milling and stockfeed producer in the country.
Tiger Brands is one of the largest manufacturers and marketers of FMCG products in Southern Africa, and has been for several decades.
This comes after the Natfoods board declared a US$4 million dividend in October.
According to a company announcement, shareholders were supposed to get a 5,61 US cents dividend in Natfoods on or about October 28 2016.
Well-placed sources said Tiger Brands was yet to get its share of the dividend.
“The board is pleased to declare a final dividend of 5,62 US cents per share payable in respect of ordinary shares of the company. This dividend is in respect of the financial year ended 30th June 2016 and will be payable in full to all shareholders of the company registered at the close of business on 14th October 2016. The payment of this dividend will take place on or about 28th October 2016,” the company chairman Todd Moyo said. “The shares of the company will be traded cum-dividend on the Zimbabwe Stock Exchange (ZSE) up to the market day of 7th October 2016 and ex-dividend as from the 11th of October 2016.”
However, Tiger Brands is yet to receive US$1,4 million dividend from its Zimbabwe investment.
A source said Tiger Brands was optimistic of getting its US$1,4 million although it was were concerned with the delays.
Questions sent to Tiger Brands group Communications & Stakeholder manager Nevashnee Naicker had not been responded to at the time of going to print.
Natfoods CE Mike Lashbrook confirmed his company was still working with authorities to get the payment processed.
“We are still talking to the authorities to get the payment to its intended beneficiaries,” he said. “Tiger brand has been an excellent supporter of our business through provision of technical skills and intellectual property.
They have been a shareholder for 60 years and I am sure they will continue for years to come.”
The payment glitch is despite assurances by the central bank in May foreign investors would have a special dispensation to repatriate all profits and dividends back home, notwithstanding an acute shortage of dollars that has forced the Reserve Bank of Zimbabwe (RBZ) to implement a raft of measures to plug currency leakages.
Zimbabwe’s cash crunch has exacerbated over the past few months on the back of declining exports and panic withdrawals following the central bank’s plans to introduce an unpopular currency to stimulate exports.
Fast running out of options to ease the cash crisis, government moved to introduce bond notes and other measures to plug currency leakages to ease the liquidity situation, a development that has rattled the public and triggered panic withdrawals of United States dollars out of banks.
RBZ deputy director in charge of exchange control Farai Masendu told delegates attending a Financial Markets Indaba in the capital in May that foreign investors would be able to freely send their money across the border.
“Where an investor has declared a dividend and you have a profit remittance that you want to make, in terms of our foreign payments, that receives priority,” Masendu said. “You are able to remit 100% of your profits and dividends.”
The move was expected to ease investor fears following announcements by the central bank that it would regulate imports.
Government increased the maximum threshold of foreign ownership on the stock exchange for individuals and corporates to a maximum of 49% in line with the indigenisation policy.
However, promises the central bank was prioritising profit remittances to foreign investors as a means of boosting confidence and attracting foreign capital have proven to be a hoax. The central bank this year set priorities for imports and imposed limits on cash withdrawals in an effort to ease an acute shortage of money.
The development, analysts say, will dissuade the movement of funds into ZSE-listed companies as investors and fund managers move funds into markets with ease of capital and profit movement in the region and the continent.
Of late, foreign investors have been liquidating their Zimbabwe positions, disposing shares worth US$18,902 million in October, an all-year high for a month and the highest since March 2015 against paltry acquisitions of US$2 million worth of stocks in the same month.
Tiger brands has 100% shareholding in a Nigerian biscuit company — Deli Foods and 49% equity stake in UAC Foods. In Cameroon, the company has a 74,7% interest in Chococam manufacturing / marketing confectionery, beverages and spreads brands, holds a 41,9% interest in Oceana Group South Africa, a 37,5% share in Natfoods, majority shareholder in Haco Tiger Brands (Kenya) and East African Tiger Brands Industries (Ethiopia) and a minority equity stake in Empresas Carozzi, a leading branded foods business in South America. The group distributes its products in more than 60 countries in the world.