92MB Zambia 27r

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO, OR TO ANY PERSON LOCATED OR RESIDENT IN, ANY JURISDICTION WHERE IT IS UNLAWFUL TO RELEASE, PUBLISH OR DISTRIBUTE THIS ANNOUNCEMENT OR THE MEMORANDUM (AS DEFINED BELOW).

13 May 2024

the republic of zambia

launch of a consent solicitation in respect of outstanding notes

The Republic of Zambia, represented by the Ministry of Finance of Zambia (the "Issuer" or "Zambia") is pleased to announce the launch of a consent solicitation (the "Consent Solicitation") in respect of its:

·    U.S.$750,000,000 5.375 per cent. Notes due 2022 (Regulation S ISIN: XS0828779594, Common Code: 082877959; Rule 144A ISIN: US988895AA69, CUSIP: 988895AA6) (the "2022 Notes");

·    U.S.$1,000,000,000 8.500 per cent.  Notes due 2024 (Regulation S ISIN: XS1056386714, Common Code: 105638671; Rule 144A ISIN: US988895AE81, CUSIP: 988895AE8) (the "2024 Notes"); and

·    U.S.$1,250,000,000 8.970 per cent. Notes due 2027 (Regulation S ISIN: XS1267081575, Common Code: 126708157; Rule 144A ISIN: US988895AF56, Common Code: 126844646, CUSIP: 988895AF5) (the "2027 Notes"),

in each case issued by the Issuer (each, a "Series" and, together, the "Existing Notes").

Zambia is soliciting consents (the "Consent Solicitation") from the holders of the outstanding Existing Notes (the "Noteholders") to consider and, if thought fit, pass extraordinary resolutions (the "Extraordinary Resolutions") at meetings of the Noteholders to be held on 4 June 2024 (the "Meetings") to approve, inter alia, mandatorily exchanging the Existing Notes of that Series for New Notes (the "Proposal"). The Consent Solicitation is made on the terms and subject to the conditions set forth in the Consent Solicitation Memorandum dated 13 May 2024 (the "Memorandum"), which is available to Noteholders from the Consent Website:  http://projects.morrowsodali.com/zambia, subject to eligibility confirmation and registration, or by contacting the Morrow Sodali Limited (the "Information and Tabulation Agent"), the contact details for which are set out at the end of this announcement. Terms used in this announcement but not defined herein have the respective meanings given to them in the Memorandum.

The notices convening the Meetings to be held at the offices of White & Case LLP at 5 Old Broad Street, London EC2N 1DW at which the Extraordinary Resolutions will be considered and, if thought fit, approved, have been published on the date hereof in accordance with the relevant terms and conditions of the Existing Notes.

Investor Call

Zambia intends to conduct a call with investors at 2:00 p.m. (London time) / 9:00 a.m. (New York City time) on 15 May 2024 at which Zambia will present the terms of the Proposal. Noteholders who would like to attend the presentation should request a link to register by emailing elora.fam@whitecase.com. Proof of ownership of the Notes may be requested.  The deadline for registration is 1:00 p.m. (London time) / 8:00 a.m. (New York City time) on 15 May 2024.

Voting Deadline

In order to participate in the Consent Solicitation, Noteholders must submit (or arrange to have submitted on their behalf Voting Instructions (as defined in the Memorandum) by no later than 5:00 p.m. (New York City time) on 30 May 2024 (the "Voting Deadline") in accordance with the terms and the procedures set out in the Memorandum.

Settlement Conditions

The implementation of the Extraordinary Resolutions and the other transactions contemplated by the Consent Solicitation and the Proposal, including the settlement of the Exchange (as defined below), are conditional upon satisfaction (as determined by Zambia in accordance with the terms of the Consent Solicitation and acting reasonably) of the following conditions (the "Settlement Conditions"):

(a)        there not having been instituted any action, investigation or proceeding by or before any court or governmental, regulatory, arbitral or administrative body which:

(1)        makes or seeks to make illegal the Exchange pursuant to the Proposal (other than by way of the implementation of, or changes to existing, legislation);

(2)        would or might result in a delay in, or restrict, the ability of Zambia to issue or deliver the New Notes in exchange for Existing Notes, or take any action required (in Zambia's sole discretion, acting reasonably) in connection with the Extraordinary Resolutions; or

(3)        imposes or seeks to impose limitations on the ability of Zambia to issue or deliver the New Notes in exchange for Existing Notes or take any action required (in Zambia's sole discretion, acting reasonably) in connection with the Extraordinary Resolutions;

(b)        all government and other approvals necessary for the implementation of the Extraordinary Resolutions and the other transactions contemplated by the Consent Solicitation and the Proposal, including the settlement of the Exchange, having been obtained and being in full force and effect;

(c)        there not having been any change or development that, in Zambia's sole discretion (acting reasonably), materially reduces the anticipated benefits to Zambia of the Consent Solicitation, the Proposal or the Exchange or that could be likely to prejudice materially the success of the Consent Solicitation, the Proposal or the Exchange or that has had, or could reasonably be expected to have, a material adverse effect on Zambia or its economy;

(d)        the Extraordinary Resolutions in respect of all Series of Existing Notes being duly passed at the relevant Meetings (or at any adjourned Meeting(s))

            ((a)-(d), together the "Conditions to Effectiveness");

(e)        the aggregate principal amount of New Notes issued on the Settlement Date in addition to the aggregate principal amount of New Notes to be delivered by Zambia to any participating holder of Existing Notes in relation to the Consent Solicitation not exceeding U.S.$40 million; and

(f)        payment by Zambia on the Settlement Date of the Committee Fees Payment and the Committee Fees Shortfall (each as defined in the Memorandum) to Weil, Gotshal & Manges (London) LLP and Newstate Partners LLP, respectively.

Zambia may, in its sole and absolute discretion, acting reasonably, waive any of either paragraphs (a), (b) or (c) of the Settlement Conditions. Paragraphs (d), (e) and (f) of the Settlement Conditions are not capable of being waived. If the Extraordinary Resolutions in relation to one or more Series of Existing Notes are not duly passed and if paragraphs (e) and (f) of the Settlement Conditions are not complied with, the Settlement Conditions will not be satisfied, the Proposal will not be implemented and the Exchange will not be completed in respect of any Series of Existing Notes.

If the Settlement Conditions have been satisfied (or waived as the case may be), then the transactions contemplated by the Consent Solicitation and the Proposal will be binding on all Noteholders of each Series, whether or not present at the relevant Meeting (or any adjourned Meeting), and each of them shall be bound to give effect to it accordingly. Upon satisfaction of the Conditions to Effectiveness and the Settlement Conditions Zambia shall give notice to the Noteholders.

Consent Fee

Subject to the Settlement Conditions being satisfied or to the extent capable of being waived (in the sole and absolute discretion of Zambia, acting reasonably) waived, the Issuer (or its nominee) will pay the Consent Fee in the amount of U.S.$15.00 per U.S.$1,000 in principal amount of Existing Notes on the Settlement Date (as defined in the Memorandum) to each Noteholder who has delivered a Voting Instruction voting in favour of the relevant Extraordinary Resolution(s) on or prior to 5:00 p.m. (New York City time) on 24 May 2024 (the "Early Consent Deadline") and has not validly withdrawn or revoked such Voting Instruction.

The Exchange

If all the Extraordinary Resolutions in respect of each Series of Existing Notes are duly passed and implemented in accordance with their terms, the entire outstanding principal amount of Existing Notes of U.S.$3,000,000,000 and Accrued Interest thereon will be mandatorily exchanged (the "Exchange") for New Notes in the following aggregate principal amounts:

(i)         2022 Notes: The aggregate outstanding principal amount of the 2022 Notes in the amount of U.S.$750,000,000 and Accrued Interest on the 2022 Notes in the amount of U.S.$142,325,521 will be exchanged for:

a.   U.S.$389,924,112 in an aggregate principal amount of New A Notes; and

b.   U.S.$309,645,618 in an aggregate principal amount of New B Notes.

(ii)        2024 Notes: The aggregate outstanding principal amount of the 2024 Notes in the amount of U.S.$1,000,000,000 and Accrued Interest on the 2024 Notes in the amount of U.S.$336,930,556 will be exchanged for:

a.   U.S.$584,205,480 in an aggregate principal amount of New A Notes; and

b.   U.S.$463,927,881 in an aggregate principal amount of New B Notes.

(iii)       2027 Notes: The aggregate outstanding principal amount of the 2027 Notes in the amount of U.S.$1,250,000,000 and Accrued Interest on the 2027 Notes in the amount of U.S.$411,125,000 will be exchanged for:

a.   U.S.$725,870,408 in an aggregate principal amount of New A Notes; and

b.   U.S.$576,426,501 in an aggregate principal amount of New B Notes,

together, the "Consideration".  The Consideration will be delivered to the Clearing Systems on the Settlement Date. The draft terms and conditions of the New A Notes and the New B Notes are set out in the Memorandum.

A summary of the Existing Notes, indicative principal amounts of New Notes that Eligible Holders may receive pursuant to the Proposal and the Exchange and any Consent Fee that Noteholders that submit and do not revoke valid Voting Instructions at or prior to the Early Consent Deadline may receive is set out below.

Settlement and Eligibility to Receive New Notes

In order to be able to receive the New Notes on the Settlement Date, Noteholders must validly submit Settlement Instructions certifying such Noteholder's status as an Eligible Holder, and must not have validly withdrawn such Settlement Instructions, at or prior to the Voting Deadline. For further information concerning Settlement Instructions please see "The Consent Solicitation - Requirements for Settlement Instructions" in the Memorandum.

Noteholders that validly submit and do not validly withdraw Settlement Instructions certifying such Noteholder's status as an Ineligible Holder at or prior to the Voting Deadline will instead receive the Substitute Consideration in accordance with the terms of the Cash Proceeds Arrangement described in the Memorandum.

Noteholders that do not validly submit (or who subsequently validly withdraw) Settlement Instructions at or prior to the Voting Deadline will be subject to the Holding Period Arrangement described in the Memorandum.

Expected Timetable of Events

The times and dates below are indicative only.  The timetable assumes that no adjourned Meetings will be required to be convened in relation to the Consent Solicitation for any Existing Notes.  If any such meeting of holders of the Existing Notes is adjourned, the notice, quorum and other requirements applicable to an adjourned meeting in the terms of the relevant Existing Notes will be complied with.

The above times and dates are subject to the right of Zambia to extend, re-open, amend and/or terminate the Consent Solicitation (as the case may be) or modify the Settlement Date (subject to applicable law, the applicable Agency Agreement and as provided in the Memorandum) with respect to the Existing Notes.

Holders of the Existing Notes are advised to check with any bank, securities broker or other intermediary through which they hold Existing Notes when such intermediary would need to receive instructions from a Noteholder in order for that Noteholder to be able to participate in the Consent Solicitation before the deadlines set out above.  The deadlines set by any such intermediary and the Clearing System for the submission of Voting Instructions and Settlement Instructions be earlier than the relevant deadlines above.  See "The Consent Solicitation-Voting and Quorum".

This announcement is released by The Republic of Zambia, represented by the Ministry of Finance of Zambia, and contains information that qualified or may have qualified as inside information for the purposes of Article 7 of Regulation (EU) 596/2014 as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018, encompassing information relating to the Consent Solicitation and the Proposal described above.

Any questions regarding the terms of the Consent Solicitation may be directed to the Information and Tabulation Agent at the address and telephone number specified below: