By Victor Fanuel
HARARE — Transvaal Africa has broken its silence after PPC Zimbabwe terminated a US$30 million agreement for the sale of its 418-hectare Arlington Estate property, insisting the collapse of the deal was driven by major legal, regulatory and infrastructure changes rather than an inability to pay.
PPC Zimbabwe last week announced that the land sale agreement had lapsed after Transvaal Africa failed to pay the agreed purchase price within the contractual timeframe, clearing the way for the cement producer to seek a new buyer.
“The Arlington Property remains a non-core asset and any other purchase offers PPCZ may receive will be considered on their merits,” PPC Zimbabwe said.
The announcement effectively puts one of Harare’s largest undeveloped strategic landholdings, located next to Robert Gabriel Mugabe International Airport, back on the market.
Transvaal Africa, which had announced ambitious plans to develop a cargo village on the site as part of the airport’s expansion, says the circumstances surrounding the transaction changed dramatically after the agreement was signed.
In a recent statement, the company said it had entered into the agreement “in good faith and remained committed to the transaction throughout the process.”
It said, however, that “a series of legal, regulatory and infrastructure developments emerged which… fundamentally changed the commercial basis upon which the transaction had been negotiated.”
According to Transvaal Africa, the first complication arose when Nyika Vanhu Housing Cooperative instituted legal proceedings against PPC Zimbabwe over ownership of the property.
The company said it was not a party to the litigation but argued that the court case delayed completion of the transaction while ownership issues were being resolved.
It said the legal dispute was followed by government infrastructure decisions that significantly altered the property’s commercial value and future use.
The Ministry of Transport and Infrastructure Development notified PPC Zimbabwe of government’s intention to acquire part of the land for construction of the Airport Express Road interchange and the widening of Airport Express Road to Manyame.
Government also gazetted land surrounding Robert Gabriel Mugabe International Airport for airport expansion, with Transvaal Africa saying the majority of the PPC land fell within the designated red zone.
The company further said the Airports Company of Zimbabwe later advised that a proposed secondary runway would occupy about 75 percent of the land covered by the proposed transaction.
Transvaal Africa had intended to build a cargo village on the site through a partnership with the Airports Company of Zimbabwe under a special purpose vehicle established to develop a modern cargo terminal and the proposed secondary runway.
“Taken together the property status, these developments fundamentally changed the property that Transvaal Africa had agreed to privately acquire and the legal and commercial framework within which the transaction was to be completed,” the company said.
It added that after assessing the legal implications of the gazetting of the land, it concluded it “could not proceed with the acquisition under the original terms of the agreement on a property it would not be allowed to legally own” under the Civil Aviation Act once the second runway is constructed.
The contrasting positions of the two companies highlight different interpretations of why the deal ultimately collapsed.
PPC Zimbabwe’s market update centres on Transvaal Africa’s failure to pay the agreed US$30 million purchase price before the contractual deadline, while Transvaal Africa argues that the property itself had materially changed because of litigation, compulsory acquisition plans and airport expansion, making the original agreement commercially and legally unworkable.
The statement also sought to dismiss any suggestion that the failed transaction reflected financial difficulties.
“This matter should therefore not be interpreted as a reflection of Transvaal Africa’s financial capacity or commitment to meet obligations.
“The company is financially sound and continues to evaluate significant investment opportunities,” the company said.
Chief executive Patson Moyo said the company remained committed to Zimbabwe despite the setback.
“Every investment decision we make is guided by commercial discipline, sound governance and long-term value creation.
“When the legal and commercial framework of a project changes materially, we have a responsibility to reassess that investment in the best interests of our investors, partners and stakeholders.
“Our commitment to Zimbabwe and to investing responsibly in its future remains as strong as ever,” Moyo said.
Transvaal Africa was co-founded by Moyo and Nomvuyo Dube and has positioned itself as an infrastructure investment company focused on aviation and logistics projects.
Despite losing the Arlington deal, it says it remains committed to working with government and strategic partners on airport expansion initiatives.
For PPC Zimbabwe, the collapse of the transaction means it is once again seeking buyers for the 418-hectare Arlington property, which it continues to classify as a non-core asset.
