ZCCM Invs.Hldgs PLC TRANSACTION regarding Kansanshi Mining PLC (3144I)
01 Diciembre 2022 - 8:48AM
UK Regulatory
TIDMZCC
RNS Number : 3144I
ZCCM Invs.Hldgs PLC
01 December 2022
ZCCM INVESTMENTS HOLDINGS PLC
[Incorporated in the Republic of Zambia]
Company registration number: 771
Share Code: ZCCM-IH
ISIN: ZM0000000037
["ZCCM-IH" or "the Company"]
TRANSACTION ANNOUNCEMENT
regarding
Kansanshi Mining PLC
The Board wishes to inform the shareholders ("Shareholders") of
ZCCM Investments Holdings Plc (" ZCCM-IH " or " the Company "), and
the market that, ZCCM-IH has entered into a transaction with First
Quantum Minerals ("FQM") whereby the Company will convert its
dividend rights and economic value in its 20 percent equity in
Kansanshi Mining Plc ("KMP") into a life of mine royalty (the
"Transaction").
The Company, in consultation with its Transaction advisors, has
prepared the financial and technical information which is required
in the Circular to ZCCM-IH shareholders to ensure that Shareholders
have sufficient information to vote on the Transaction at an
Extraordinary General Meeting ( "EGM ").
In compliance with the requirements of Section 9 of the Listings
Requirements of the Lusaka Securities Exchange ( "LuSE ") , the key
features of the Transaction are as follows.
Brief Particulars
of the Transaction * The grant of a life of mine royalty (the "Royalty")
to ZCCM-IH in respect of 3.1 per cent of the gross
value of Royalty products to be extracted from the
KMP mine pursuant to a Royalty Agreement to be
executed on the Transaction closing date.
* Post transaction, the economic value of ZCCM-IH's 20%
equity stake in KMP will be realised through the VAT
refunds.
* The varied rights attached to the ZCCM-IH Class A
shares in KMP will be amended and prescribed in the
amended KMP Articles of Association ("New KMP
Articles") to be adopted at Closing.
* ZCCM-IH Class A shares will entitle the Company to
nominate 2 Directors to the KMP Board each with
voting rights .
* At closing ZCCM-IH will de-recognise its equity stake
in KMP as an investment in associate and recognise
the acquired Royalty as a financial asset.
Conditions Precedent Closing or completion of the Transaction is subject
include: to the fulfilment or waiver of all the following conditions
precedent in accordance with the Framework Agreement:
* ZCCM-IH Shareholders approval.
* Approval of the Transaction by the Competition and
Consumer Protection Commission.
* Letter of No Objection from the Securities and
Exchange Commission of Zambia concerning the New KMP
Articles.
* Withdrawal of the criminal complaint against KMP
directors and confirmation of such withdrawal
* Zambia Revenue Authority confirmation of the parties'
tax position on the Transaction.
Key Financial Terms
of Agreement * Pursuant to the KMP shareholder resolution, KMP will
make a dividend declaration of United States Dollars
Nine Hundred Seventy-Five Million (US$975,000,000)
payable in proportion to the shareholding structure
(ZCCM-IH:20% and Kansanshi Holdings Ltd 80%) to be
paid no later than the date falling seven (7) days
following the date of execution of the framework
agreement as stated below:
ü United States Dollars One Hundred and Ninety-Five
Million (US$195,000,000) to ZCCM-IH and United States
Dollars Seven Hundred and Eighty Million (US$780,000,000)
to Kansanshi Holdings Limited (" KHL ").
* At Closing, the change of KHL's Class A shares to
Class C shares and the variation of ZCCM-IH's rights
(inter alia, to reflect that ZCCM-IH's dividend right
is converted into the Royalty rights as further
described below) pursuant to the New KMP Articles and
the Termination Agreement between KHL, KMP and
ZCCM-IH relating to the termination of rights and
obligations under the KMP Shareholders Agreement.
* At Closing, a Royalty consideration of Six Hundred
and Eighty-Five Million Dollars (US$ 685,000,000)
representing ZCCM-IH's dividend declared on Class A
shares by KMP, will be settled by issuance of a Loan
Note by KMP to ZCCM-IH. The Royalty Agreement will be
executed and delivered by using the Loan Note as
Royalty consideration.
* At Closing, ZCCM-IH will have the right to receive
quarterly Royalty payments of 3.1% of the Gross Value
of Royalty Products (Copper, Gold, and all other
metal products) sold or otherwise extracted at KMP,
throughout the life-of-mine, pursuant to the Royalty
Agreement.
* In accordance with the VAT Agreement between KMP and
ZCCM-IH, KMP has agreed to pay to ZCCM-IH 20% of the
aggregated amount of the Value-Added Tax refunds as
of 30 June 2022 less 20% of any VAT claim costs
incurred, as and when received by KMP from ZRA post
the closing of the Transaction. The aggregated amount
of the VAT refund is:
ü US$ 442 million and
ü ZMW 433 million
Effective Date The Closing Date, as defined in the Framework Agreement.
Rationale for the
Transaction * A key objective of the ZCCM-IH Strategic Plan
(2020-2026) is to extract value from the ZCCM-IH
portfolio by focusing on the income flow from each
investee company. The right to receive quarterly
Royalty payments ensures that ZCCM-IH is guaranteed a
predictable and regular revenue stream over the
Kansanshi life of mine.
* Another key objective of the ZCCM-IH Strategic Plan
is the investment in greenfield and brownfield mining
and mining-related ventures across a diverse range of
minerals. With this regular Royalty income from KMP,
ZCCM-IH will be better placed to finance these
investments;
The Proforma effect of the Transaction
Before Pro Forma After Percentage
Adjustments change (%)
EPS (ZMW) 12.22 16.12 28.34 132%
------------ ------------- ------------ ------------
HEPS (ZMW) 12.01 10.00 22.01 83%
------------ ------------- ------------ ------------
NAV per share 168.81 16.12 184.93 10%
------------ ------------- ------------ ------------
Ordinary Shares in issue 160,800,286 - 160,800,286 -
------------ ------------- ------------ ------------
Shares in issue 160,800,286 - 160,800,286 -
------------ ------------- ------------ ------------
Weighted average number
of Ordinary Shares in
issue 160,800,286 - 160,800,286 -
------------ ------------- ------------ ------------
General Meeting and the Transaction Circular
i. A notice of the Extraordinary General Meeting ("EGM") to
consider the Proposed Transaction will be published on or before
[6(th) January 2023]; and
ii. A circular to Shareholders giving full details of the
Transaction will be mailed to Shareholders on or about [5 January
2023].
The Circular will also be available in electronic form on the
LuSE website (www.luse.co.zm) or Stockbrokers Zambia Limited's ("
SBZ " ) website (www.sbz.com.zm). Alternatively, shareholders may
collect the Circular from the Company's Transfer Secretaries and/or
Transaction Sponsoring Broker whose details are below:
Transaction Sponsoring Broker Transfer Secretary
Stockbrokers Zambia Limited Corpserve Transfer Agents Limited
32 Lubu Road 6 Mwaleshi Road
Longacres Olympia Park
P.O. Box 38956 Lusaka
Lusaka Zambia
Shareholders are advised to continue to exercise caution when
dealing in the Company's securities until the completion of the
Transaction.
By Order of the Board
Chabby Chabala
Company Secretary
Issued in Lusaka, Zambia on 01 December 2022
Lusaka Securities Exchange Sponsoring Broker for the Transaction
T | +260-211-232456
E | advisory@sbz.com.zm
W | www. sbz.com.zm
Stockbrokers Zambia Limited (SBZ) is a member of the Lusaka Securities Exchange and is regulated
by the Securities and Exchange Commission of Zambia.
==================================================================================================
First Issued on 01 December 2022
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END
CONUASSRUVUURAA
(END) Dow Jones Newswires
December 01, 2022 09:48 ET (14:48 GMT)
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