The sale of People’s Trading Centre (PTC) to Tafika Holdings is facing strong resistance from some members of the senior management team, who have written its former majority shareholder, Press Corporation Limited (PCL) plc, to terminate the share purchase agreement (SPA).
The request for the termination of SPA is contained in a letter dated May 18 2022.
Signatories of the letter include Treasury and Creditors Manager Edgar Chilumpha, Markets Development Manager Chiku Kaphuka, Internal Audit Manager Justin Masanjika, acting Merchandise Manager Dalitso Chalira, Operations Manager (Centre) Dalitso Kadzamira, acting Operations Manager (South) Gibson Nyirenda, Buyer Chance Chimchere and Information Systems Manager Dennis Mhango.
The senior management members argue that Tafika Holdings has failed to prove to external auditors that it has the financial capacity, adequate financial resources or financial facilities to honour the K6 billion purchase considerations, and that it has failed to pay Escom, Rab Processors, and pension arrears which are part of the K6 billion purchase consideration.
“Based on the facts above, we are forced to agree with Deloitte, the external auditors for PTC, that Tafika Holdings does not have the financial capacity to raise the K6 billion Purchase Consideration for PTC. As such, the fundamental condition of this sale has been bleached and will not be remedied within any reasonable time,” the letter reads.
The letter further indicates that, in the absence of any capital injection, this is the last month that PTC will be able to pay salaries as it has depleted working capital through payment of salaries.
Press Corporation Limited acting Chief Executive Officer Lyton Chithambo acknowledged receiving the letter but was quick to point out that the letter was misdirected because the conglomerate exited PTC this year and they have nothing to do with it.
He added that as part of the exit process, PCL injected K12.5 billion into PTC to help in the K18.5 billion recapitalisation which PTC management was pushing for before the SPA with Tafika Holdings.
Tafika Holdings Executive Chairman, who is also serving as Executive Chairman for PTC, Arson Malola querried where PTC senior management has gotten the financial report because, according to him, the financial statement has not been finalised.
“PTC will have a turn-around with our coming because we just need to deal with pilferage which has been so bad in the past years and stock the shops and stocks will start trekking in from next week because suppliers have assured us,” he said.
PTC is one of the oldest and scattered chain stores which was owned by PCL. But early this year, PCL disposed off its shares and consequently signed an agreement with Tafika Holdings for the sale of the chain store.
According to information available, the company needs K18.5 billion for a turn-around to pay loans and liabilities which PCL has already sorted out by proving K12.5 billion, with Tafika expected to sort the remaining K6 billion.
Justin Mkweu is a fast growing reporter who currently works with Times Group on the business desk.
He is however flexible as he also writes about current affairs and national issues.