Zimbabwe: AB InBev to place over $120 mln in unremitted dividends to help reduce pressure on Delta Corporation

Delta Corporation's anchor shareholder, AB InBev, will place over $120 million in unremitted dividends and fees in Reserve Bank of Zimbabwe (RBZ) savings bonds thereby reducing pressure on the demand for foreign currency by the Zimbabwe Stock Exchange listed beverages concern, the Bulawayo24 News reported on February 1.

The global brewer has 40 percent shareholding in the Zimbabwe Stock Exchange-listed concern. Delta company secretary Alex Makamure said AB InBev has supported Delta through credit lines for the importation of raw materials since access to foreign currency became limited and continues to provide this support.

"In addition, AB InBev has agreed to place over $120 million due to them in relation to unremitted dividends and fees into RBZ savings bonds in order to reduce the pressure on the demand of foreign currency," he said.

Of that amount, about $95 million is unremitted dividend and the balance caters for fees and other charges, Makamure told Business Times last week.

The beverages concern recently paid out an interim dividend of $0,025 per share. In total, Delta paid $31,7 million as interim dividend.

AB InBev's share of the dividend was about $11 million after taking out the 10 percent withholding tax.

RBZ Savings Bonds were introduced in 2017 to encourage individuals, families, households, small and medium enterprises, schools, universities, public and private institutions, corporates, churches and investors to nurture a culture of saving and building national wealth.

The minimum investment is $100 and there are no commission, agency or service fees. The bonds have rolling maturities of one year, two years, three years and five years, have an interest rate of 7 percent per annum and tax free on interest earned.

As at August 31 2018 the Savings Bonds had raised $1,5 billion.

The biting foreign currency shortages have seen listed firms struggling to remit dividends to foreign shareholders.

The failure by companies to remit dividend to foreign shareholders comes despite the setting up of a $5 million portfolio investment fund by RBZ in 2017 to speed up the repatriation of portfolio-related funds to foreign investors invested on the stock market.

In its third quarter report to December 31, Delta said its lager beer volume grew by 27 percent and was up 43 percent for the nine months. The sorghum beer volume grew by 15 percent compared to the prior year for the quarter six percent for the nine months to December 31 2018.

31 January, 2019