South African companies operating in Zimbabwe are anxious about the impact of the real time gross settlement (RTGS) dollar, the currency unveiled this week by the Reserve Bank of Zimbabwe.
They are particularly concerned about funds tied up in unremitted foreign currency receipts or outstanding dividend payments.
The central bank also announced this week that the bond note would be allowed to float against the US dollar, after insisting for two years on 1:1 parity.
Adrian Cloete, portfolio manager at PSG Wealth in Cape Town, said South African companies with significant holdings in bond notes valued at par to the greenback would be hardest hit.
"Those South African companies … when preparing their financial statements, would be impacted as they would have to translate now at a different rate," said Cloete.
SAA and sugar producer Tongaat Hulett, which have strong commercial interests in Zimbabwe, quickly reacted to the central bank news.
In a trading update on Friday, Tongaat Hulett said though its Zimbabwe operation was self-sufficient and did not require funding from elsewhere in the group, its earnings would be hit by the weaker exchange rate.
The company said it had not received any dividend payments since September 2017 and was "reviewing the accounting implications of the currency dynamics".
US DOLLARS AT SAA
SAA has implemented strict curbs on ticket payments in bond notes or the RTGS dollar.
In a statement on Thursday, the airline said it would accept payment in RTGS dollars only for same-day travel. Future travel would have to be paid for in hard currency or by international credit card.
Harare travel agents said on Friday the only two airlines still accepting local electronic settlement were Air Zimbabwe and Fastjet Zimbabwe.
SAA is thought to have close to R1bn stuck in Zimbabwe, and spokesperson Tlali Tlali said he was optimistic the monetary policy would ring-fence the money and allow its repatriation at the old rate of 1:1.
"The airline industry runs on globally set procedures; the RTGS dollar would need to be incorporated into the global pool of currencies," he said.
"There would be a need to have a published exchange rate so that when tickets are issued they can reflect the currency and equivalent collected.
"However, the introduction of the RTGS dollar with an exchange rate yet to be determined would not make it possible to issue any tickets by that method," Tlali said.
"Clarity from the central bank is required to regularise this currency so that it is acceptable for ticketing. Therefore, the only forms that can work at the moment are US dollars, cash or international credit card."
The currency change could affect more than 15 major companies from SA exposed to sectors including financial services, retail, fast food, agriculture and mining.
They include Delta Beverages, 40% owned by Anheuser-Busch InBev; MultiChoice; PPC; Metallon Gold; and Zimplats, owned by Impala Platinum.
Companies such as Tiger Brands, Country Bird Holdings, Edcon, Pick n Pay, Sanlam, Nedbank, Standard Bank, Old Mutual and Alexander Forbes have standalone units or are invested in a locally owned business.
Marthinus Stander, the Country Bird CEO who recently announced a $150m investment in the poultry sector, said it was too early to assess the impact of the RTGS dollar announcement.
"We cannot control this monetary policy matter and prefer to occupy ourselves and our time focusing on what we do best, and that is growing chicken," Stander said.
Country Bird owns KFC in Zimbabwe and is owed an undisclosed amount in unremitted franchise fees.
"The government and banks are very helpful in this regard [repatriating franchise fees] and understand our plight," said Stander.
Central bank governor John Mangudya told a business breakfast the initial RTGS value would be pegged at $2.50 to the US dollar, and the rate would be allowed to float on a "willing buyer, willing seller" basis.
Neville Mandimika, an economist at Rand Merchant Bank in Johannesburg, said the central bank - notorious in the past for market interference - should "take a step back" and "let market forces do what they will".
"Intervention is in large part why the black market flourished, as people had no confidence in the prescribed 1:1 value of the US dollar to the bond note.
"The [reserve bank] did say they have secured lines of credit to back the proposed system," he said.
In a note to clients, NKC Africa economist Jee-A van der Linde said: "The fact that officials finally came to their senses and ditched the notion that Zimbabwe's quasi-currency was at par with the US dollar is comforting."
On Friday, President Emmerson Mnangagwa gazetted a statutory instrument that provides legal cover for RTGS dollars - in the form of electronic currency, bond notes and coins - to be used as legal tender.
An interbank trading system is expected to start operating tomorrow. Many banks put up notices this weekend advising clients of disruption as they update their systems.
An executive at one bank said: "All things being equal, clients would be able to buy dollars from the bank."
Former finance minister Tendai Biti, deputy chair of the Movement for Democratic Change, said: "It's insanity. They have reintroduced the Zimbabwe dollar through the back door."..