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					        A roaring Zimbabwe

         lion goes to London




Patterson Chiweshe
    Karen Frisch
  Sergio Penchas
 Denis Rappaport
                           1
          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.
                                              2
       Meikles Africa Limited


   More than a 100 years of established
    operations.
   4 divisions: supermarkets,hotels,
    department stores and corporate.
   Revenues of U$170 Million in 1996(3.8
    % of GDP).
   Revenues CAGR (93-96) of 7% in real
    terms                                   3
         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

                                                4
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
                                                5
          Discussion’s Topics


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

                                            6
        Valuation



    PV of Cash Flows (1997 - 2006)     104,927
PV of Terminal Value (from 2008 on)    131,533
                                Debt    14,476
                               Cash      9,362
             Total Value of the Firm   231,346
                         Share Price      1.57




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