Patterson Chiweshe

1
A roaring Zimbabwe lion goes to London

• Patterson Chiweshe
• Karen Frisch
• Sergio Penchas
• Denis Rappaport

2
Zimbabwe Main Facts

• Zimbabwe nation was created in 1980.
• Single political party dominance since 1980 with
  relative political stability.
• One of the most diversified African economies-25
  GDP from Manufacturing.
• Economy has been previously closed to foreign
  investment.

3
Meikles Africa Limited

• More than a 100 years of established operations.
• 4 divisions supermarkets,hotels, department
  stores and corporate.
• Revenues of U170 Million in 1996(3.8 of GDP).
• Revenues CAGR (93-96) of 7 in real terms

4
Private Placement

• International private placement of US 75 Million
  (33 of company capital)
• Why a private deal
• Size of the transaction
• Sovereign risk
• Easier placement to sophisticated investors

5
Discount Factor - Risk Considered

• Characteristics of the company
• Domestic costs and revenues structure
• Low domestic competitive environment
• Entry barriers
• Strong alliances with South African companies
• Proceeds of private placement to highly
  internally invest

6
Discussions Topics

• Discount Rate
• Risk considered
• Time varying discount rates
• Terminal discount rates
• How to mitigate risks
• Additional information required to invest

7
Valuation