| Tue 2 Sep 2008, 12:56 | | ZCI - Zambia Copper Investments - Voluntary Offer And The Appointment Of |
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ZCI
ZAKK
ZCI - Zambia Copper Investments - Voluntary Offer And The Appointment Of
Additional Directors
Zambia Copper Investments Limited
(Registered in Bermuda)
(South African registration number 1970/000023/10)
JSE share code: ZCI & ISIN: BMG988431240
Euronext share code: BMG988431240
("ZCI" or "the company")
VOLUNTARY OFFER BY ZCI TO REPURCHASE FROM ALL SHAREHOLDERS ALL OR A PORTION
OF THEIR ZCI SHARES, A NEW BUSINESS PLAN FOR THE COMPANY AND THE APPOINTMENT
OF ADDITIONAL DIRECTORS
1. As advised in the announcement released on SENS on 8 August 2008,
following the completion of the sale by ZCI of its 28.4% share of
Konkola Copper Mines Plc ("Konkola") to Vedanta Resources Plc for the
amount of US$213.15 million, in terms of the JSE Listings Requirements,
the company has been reclassified as a cash shell with effect from 10
April 2008. ZCI was advised by the JSE on 12 August 2008 that if ZCI
fails to enter into an agreement to acquire a viable asset prior to
10 October 2008, the JSE will seek to enforce its Listings Requirements
and suspend the ZCI shares from trading for a period of 3 months from 10
October 2008. Such suspension will trigger a simultaneous suspension on
Euronext.
2. For the past 6 months, shares in ZCI ("ZCI shares") have been trading at
a significant discount to net asset value.
3. In order to offer shareholders in ZCI ("ZCI shareholders") a means of
selling their ZCI shares at a fair value, the directors have resolved to
make an offer to repurchase all or some of each ZCI shareholder`s ZCI
shares at a price of 186.48 United States cents per share, being the
unaudited net asset value of the company as at 31 August 2008 ("the
offer").
4. With the remaining cash resources of the company following the offer,
the directors have also resolved to pursue a new business plan for the
company. However, the new business plan will only proceed if the offer
is accepted in respect of less than 78% of the ZCI shares currently in
issue. In terms of the new business plan, the company will seek to make
various investments in the mining and minerals industry in certain
countries in sub-Saharan Africa, being the Republics of Botswana,
Malawi, Namibia, Tanzania and Zambia. At this stage, the ZCI board
intends retaining the listings on the JSE and Euronext.
5. All the terms and conditions of the offer, further details of the new
business plan and the full rationale for pursuing this course of action
is set out in a circular that has today been posted to shareholders
("circular").
6. In order to implement the new business plan, the directors propose the
following additional measures:
6.1 the appointment of 3 new directors, being Messrs MM du Toit and E
Hamuwele and Professor S Simukanga, whose details are set out in
the circular; and
6.2 revised remuneration and incentives for the board of directors,
which will be disclosed in due course once the business plan has
been implemented.
7. If the offer is accepted in respect of 78% or more of the ZCI shares
currently in issue, the directors do not intend pursuing the new
business plan and the remaining shareholders after the offer will be
requested to authorise the voluntary liquidation of the company, the
distribution of the remaining assets to those shareholders and the
termination of ZCI`s listings on the JSE and Euronext.
8. For the reasons stated above, the directors of ZCI deem it appropriate
and in the interests of all shareholders to make the offer for the
following reasons:
8.1 the offer is open to all ZCI shareholders irrespective of the size
of their shareholdings;
8.2 each ZCI shareholder is able to individually decide whether or not
to accept the offer;
8.3 a ZCI shareholder wishing to accept the offer may decide whether to
sell some or all of his ZCI shares; and
8.4 the offer enables every ZCI shareholder to sell ZCI shares in an
inexpensive manner without incurring transaction costs.
9. ZCI has the necessary authority to implement the offer in terms of its
constitution and the Bermuda Companies Act. However, in order to comply
with the provisions of the JSE Listings Requirements, the offer is
subject to the condition precedent that the secretary or any director of
ZCI confirms in writing that a resolution of ZCI shareholders
authorising the offer has been duly passed at the special general
meeting of the company convened to be held at Hotel Novotel, 35 rue du
Laboratoire, Luxembourg on Wednesday 24 September at 11h30 ("special
general meeting"). In terms of the JSE Listings Requirements, this
resolution must be passed by a majority of not less than three-fourths
of the shareholders of the company voting in person or by proxy and
entitled to vote at the special general meeting.
10. A copy of the notice of the special general meeting is attached to the
circular. The board of directors of ZCI recommends that ZCI shareholders
vote in favour of all the resolutions at the special general meeting.
11. For purposes of calculating the net asset value of the company which
determined the offer consideration, the directors have prepared an
unaudited balance sheet as at 31 August 2008 and an income statement for
the period ended 31 August 2008, which is contained in the circular. A
letter from the auditors confirming this calculation will be provided to
the JSE prior to Monday 22 September 2008.
12. The offer consideration will be paid on Friday 17 September 2008 in
United States Dollars, except that ZCI shareholders on the South African
register will be paid in South African Rands. The Rand equivalent of the
offer consideration to be paid to such shareholders will be based on the
exchange rate quoted by FirstRand Bank Limited to its retail customers
exchanging US Dollars for Rands at the close of business on
Friday 10 October 2008. The Rand equivalent will be announced on SENS on
Monday 13 October 2008.
13. The offer consideration will be funded out of the cash and liquid assets
of the company, comprising bank deposits and investments in an equity
mutual fund. ZCI shareholders are not obligated to sell any ZCI shares
if they do not wish to do so.
14. The offer is governed by and to be construed in accordance with the laws
of Bermuda. The making of the offer to a shareholder may be affected by
the laws of the relevant jurisdiction in which the shareholder resides.
All shareholders should inform themselves about and observe fully all
applicable legal requirements of their applicable jurisdiction. It is
the responsibility of any shareholder wishing to accept the offer to
satisfy himself as to the full observance of the laws of the relevant
jurisdiction in connection therewith, including the obtaining of any
governmental, exchange control or other consents which may be required,
the compliance with other necessary formalities and the payment of any
issue, transfer, capital gains or other taxes or other requisite
payments due to such jurisdiction.
15. Shareholders accepting the offer should seek advice from appropriate
professional advisers if they are in any doubt whatsoever about their
tax position and in particular to confirm how the applicable tax
legislation applies in their specific personal circumstances and the
consequences thereof.
15.1 Pro forma financial effects of the offer
In order to comply with the JSE Listings Requirements, a range of
the unaudited pro forma financial effects of the offer is set out
below. These pro forma financial effects are the responsibility of
the directors and have been prepared for illustrative purposes only
to provide information about how the offer may impact shareholders
and because of their nature may not give a fair reflection of the
company`s financial position, changes in equity, results of
operations or cash-flows after implementation of the offer, or of
the company`s future earnings. Due to the inherent uncertainty
regarding the exact level of acceptance of the offer, the directors
have prepared the below effects calculations assuming either 30%
acceptance or 70% acceptance of the offer.
15.1.1 Effects assuming 30% acceptance
Before the Adjustments After the
offer offer
Audited Unaudited Unaudited
pro forma pro forma
as at
31/03/2008
Basic earnings per 22.17 8.84 31.01
share (US cents)
Headline earnings per 25.63 8.48 34.11
share (US cents)
Net asset value per 176.126 8.62 184.744
share (US cents)
Tangible net asset 176.126 8.62 184.744
value per share (US
cents)
Number of shares in 126,197,362 (37,859,209) 88,338,153
issue
Weighted average 126,197,362 (37,859,209) 88,338,153
number of shares in
issue
Assumptions:
For the purposes of computing the pro forma basic and headline earnings
per share, it was assumed that:
a. the offer was effected on 1 April 2008 (this date was used instead
of 1 April 2007 due to the change in accounting presentation by the
company during that financial year);
b. a total of 37,859,209 shares (30% of the current issued share
capital) were repurchased for an aggregate consideration of
US$70,600,000;
c. estimated costs of US$580,000 relating to the offer were incurred;
d. the proceeds received by ZCI from the sale of the shareholding in
Konkola (US$213,150,000) were used to fund the offer
consideration; and
e. all US$ amounts are rounded to the nearest thousand.
For the purposes of computing the pro forma net asset value, it was
assumed that:
a. the offer was effected on 31 March 2008;
b. a total of 37,859,209 shares (30% of the current issued share
capital) were repurchased for an aggregate consideration of
US$70,600,000;
c. estimated costs of US$580,000.00 relating to the offer were
incurred;
d. the proceeds from the sale of the shareholding in Konkola
(US$213,150,000) were received on 31 March 2008; and
e. all US$ amounts are rounded to the nearest thousand.
15.1.2 Effects assuming 70% acceptance
Before the Adjustments After the
offer offer
Audited Unaudited Unaudited pro
pro forma forma
as at
31/03/2008
Basic earnings per 22.17 50.20 72.37
share (US cents)
Headline earnings 25.63 53.96 79.58
per share (US
cents)
Net asset value 176.126 6.30 182.429
per share (US
cents)
Tangible net asset 176.126 6.30 182.429
value per share
(US cents)
Number of shares 126,197,362 (88,338,153) 37,859,209
in issue
Weighted average 126,197,362 (88,338,153) 37,859,209
number of shares
in issue
Assumptions:
For the purposes of computing the pro forma basic and headline earnings
per share, it was assumed that:
a. the offer was effected on 1 April 2008 (this date was used instead
of 1 April 2007 due to the change in accounting presentation by the
company during that financial year);
b. a total of 88,338,153 shares (70% of the current issued share
capital) were repurchased for an aggregate consideration of
US$164,733,000;
c. estimated costs of US$580,000 relating to the offer were incurred;
d. the proceeds received by ZCI from the sale of the shareholding in
Konkola (US$213,150,000) were used to fund the offer consideration;
and
e. all US$ amounts are rounded to the nearest thousand.
For the purposes of computing the pro forma net asset value, it was
assumed that:
a. the offer was effected on 31 March 2008;
b. a total of 88,338,153 shares (70% of the current issued share
capital) were repurchased for an aggregate consideration of
US$164,733,000;
c. estimated costs of US$580,000.00 relating to the offer were
incurred;
d. the proceeds from the sale of the shareholding in Konkola
(US$213,150,000) were received on 31 March 2008; and
e. all US$ amounts are rounded to the nearest thousand.
The unaudited pro forma balance sheets and income statements which were
used to prepare the above range of financial effects are included in
Annexure 4 to the circular.
Salient dates and times
2008
Conditional offer opens at 09h00 on Tuesday, 2 September
Last day to lodge forms of proxy for
the special general meeting by 11h30
on Monday, 22 September
Special general meeting to be held at
11h30 on Wednesday, 24 September
Results of special general meeting
released on SENS and published in the
press, and offer becomes
unconditional on Thursday, 25 September
Last day to trade to participate in
the offer is Friday, 3 October
ZCI shares trade ex the offer from Monday, 6 October
Closing date of the offer at 12h00 on Friday, 10 October
Record date for purposes of
participating in the offer is Friday, 10 October
Rand equivalent of the offer
consideration payable to shareholders
on the South African register to be
determined at close of business on Friday, 10 October
Results of the offer and Rand amount
payable to shareholders on the South
African register, released on SENS on Monday, 13 October
Settlement date (offer consideration
paid) and shares repurchased in terms
of the offer cancelled on Friday, 17 October
Shares repurchased in terms of the
offer delisted from the JSE with
effect from the commencement of
trading (09h00) on Monday, 20 October
Notes
1. All dates and times are South African and Central European (GMT+1)
times.
2. These dates and times are subject to change. Any such change will
be released on SENS.
3. Share certificates may not be dematerialised or re-materialised and
no transfers between registers may take place between Monday 6
October 2008 and Friday 10 October 2008, both days inclusive.
Bermuda
2 September 2008
International legal adviser
Maitland Advisory LLP
Corporate finance advisers
iCapital Mauritius Limited
JSE sponsor
Rand Merchant Bank (a division of FirstRand Bank Limited)
Date: 02/09/2008 12:56:01 Produced by the JSE SENS Department.
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implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
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