| Thu 31 Dec 2009, 12:00 | | ZCI - Zambia Copper Investments Limited - Unaudited Interim Financial Results Of |
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ZCI
ZAKK
ZCI - Zambia Copper Investments Limited - Unaudited Interim Financial Results Of
ZCI For The Six Months Ended 30 September 2009
ZAMBIA COPPER INVESTMENTS LIMITED
(Registered in Bermuda)
(South African registration number 1970/000023/10)
JSE code: ZCI ISIN: BMG988431240
Euronext share code: BMG988431240
("ZCI" or "the Company")
UNAUDITED INTERIM FINANCIAL RESULTS OF ZCI FOR THE SIX MONTHS ENDED 30 SEPTEMBER
2009
Consolidated Statement of Comprehensive Income
for the six months ended 30 September 2009
expressed in thousands of US Dollars
Unaudited Reviewed Audited
Six months Six months Twelve months
ended ended ended
30-Sep-09 30-Sep-08 31-Mar-09
Note
General and administrative (2,212) (1,028) (2,177)
expenses
Total operating expenses (2,212) (1,028) (2,177)
Finance income 4 2,282 2,652 3,652
Finance expense - (887) (887)
Profit before taxation 70 737 588
Taxation 8 (16) (39) (72)
Profit from operations 54 698 516
attributable to equity
shareholders
Other comprehensive income
Transfer of revaluation reserve - (702) (702)
on available for sale investment
Reversal of hedging reserve - 12,113 12,113
Comprehensive income 54 12,109 11,927
attributable to equity
shareholders
Basic and diluted earnings per 5 0.1 0.55 0.56
ordinary share in US Cents
Consolidated Statement of Financial Position
as at 30 September 2009
expressed in thousands of US Dollars
Unaudited Reviewed Audited
30-Sep-09 30-Sep-08 31-Mar-09
Note
Assets
Non-current assets
Other investments 6 11,352 - -
Current assets
Available for sale investment - 10,733 -
Trade and other receivables 7 35,767 5,726 76
Cash and cash equivalents 56,135 219,234 102,939
91,902 235,693 103,015
Total assets 103,254 235,693 103,015
Capital and reserves
Capital 102,688 334,547 102,688
Retained earnings / (accumulated 54 (100,172) -
loss)
Total equity 102,742 234,375 102,688
Current liabilities
Accounts payable and accrued 512 1,318 327
liabilities
Total equity and liabilities 103,254 235,693 103,015
Number of ordinary shares in 55,677,643 126,197,362 55,677,643
issue
Net asset value (per ordinary 184.53 185.72 185.26
share) in USD cents
Consolidated Statement of Changes in Equity
for the six months ended 30 September 2009
expressed in thousands of US Dollars
Share Contributed Revalua- Assets Accumu- Total
capital surplus tion clas- lated equity
reserve sified loss
as held
for sale
Balance at 30,299 304,248 702 (12,113) (100,870) 222,266
31 March
2008
Revaluation - - (702) - - (702)
on
available
for sale
investment
Hedging - - - 12,113 - 12,113
reserve of
associated
company
Profit for - - - - 698 698
the period
Balance at 30,299 304,248 - - (100,172) 234,375
30
September
2008
Share (16,924) (114,581) - - - (131,505)
buyback and
reduction
Transfer - (100,354) - - 100,354 -
from
contributed
surplus
Loss for - - - - (182) (182)
the period
Balance at 13,375 89,313 - - - 102,688
31 March
2009
Profit for - - - - 54 54
the period
Balance at 13,375 89,313 - - 54 102,742
30
September
2009
Consolidated Statement of Cash Flows
for the six months ended 30 September 2009
expressed in thousands of US Dollars
Unaudited Reviewed Audited
Six Six Twelve
months months months
ended ended ended
30-Sep-09 30-Sep-08 31-Mar-09
Cash flow from operating activities
Cash paid to suppliers and employees (2,027) (2,686) (4,769)
Cash utilised by operating activities (2,027) (2,686) (4,769)
Interest received 1,273 2,224 3,614
Income tax paid - (38) (88)
Net cash utilised by operating activities (754) (500) (1,243)
Cash flow from investing activities
Loans and other receivables issued to ACU (36,444) - -
Repayments received from ACU 1,746 - -
Acquisition of shares in ACU (11,352) - -
Proceeds from disposal of available for - - 10,733
sale investment
Proceeds from disposal of assets - 213,150 213,150
classified as held for sale
Proceeds from partial disposal of - - 5,220
investment in subsidiary
Cash (utilised) / generated by investing (46,050) 213,150 229,103
activities
Cash flow from financing activities
Repurchase of own shares - - (131,505)
Net (decrease) / increase in cash and cash (46,804) 212,650 96,355
equivalents
Opening cash and cash equivalents 102,939 6,584 6,584
Closing cash and cash equivalents 56,135 219,234 102,939
Notes to the interim financial statements
for the six months ended 30 September 2009
expressed in thousands of US Dollars
1. Reporting entity
Zambia Copper Investments Limited ("ZCI", the "Company") is a company
incorporated as an investment holding company in Bermuda with its primary
listing on the JSE Limited. It has a secondary listing on the Paris Bourse,
both of which are suspended pending resolution of the company`s continued
listing status on the JSE.
The Company is exempt from Bermuda taxation.
The condensed consolidated interim financial statements of the Company as at and
for the six months ended 30 September 2009 comprise the Company and its
subsidiaries (together referred to as the "Group").
The consolidated financial statements of ZCI and its subsidiaries as at and for
the year ended 31 March 2009 are available upon request from the Company`s
registered office at Clarendon House, 2 Church Street, Hamilton, Bermuda or at
ZCI`s website at www.zci.lu.
2. Basis of preparation and accounting policies
These condensed consolidated interim financial statements have been prepared in
accordance with the disclosure requirements of IAS 34 Interim Financial
Reporting and the measurement and recognition principals of International
Financial Reporting Standards ("IFRS"). They do not include all of the
information required for full annual financial statements, and should be read in
conjunction with the Group`s audited consolidated financial statements and notes
for the year ended 31 March 2009.
The financial information contained in this interim report has not been
reviewed, nor audited, by the Company`s auditors. The interim report was
approved by the Board of Directors on 29 December 2009.
The interim report has been prepared on the basis of the accounting policies set
out in the most recently published annual report of the Group for the year ended
31 March 2009, except for the adoption of the following standards which are
mandatory for accounting periods beginning on or after 1 January 2009:
IAS 1 Revised Presentation of Financial Statements
IFRS 2 Share-based Payment - Vesting Conditions and Cancellations
IFRS 8 Operating Segments
IFRS 3 Business Combinations
IAS 27 Consolidated and Separate Financial Statements
3. Segment information
As of 1 April 2009, the Group determines and presents operating segments based
on the information that internally is provided to the Board of Directors, who is
the Group`s chief operating decision maker. The adoption of IFRS 8 had no
impact on the disclosure or presentation as the Group is still organized into
one segment, being its principal activity of investment holding company.
4. Finance income
Six months Six months Twelve months
ended ended ended
30-Sep-09 30-Sep-08 31-Mar-09
Interest income on cash and cash 193 2,652 3,652
equivalents
Interest income accrued on ACU bridge 1,047 - -
loan
Other finance income 1,042 - -
2,282 2,652 3,652
5. Earnings per share
Six months Six months Twelve months
ended ended ended
30-Sep-09 30-Sep-08 31-Mar-09
Headline earnings / (loss) (in USD 54 698 (186)
thousands)
Exceptional items:
Reversal of provision on available - - 702
for sale investment
Earnings attributable to shareholders 54 698 516
Weighted average number of ordinary 55,677,643 126,197,362 92,869,550
shares in issue (thousands)
Headline earnings / (loss) per share 0.1 0.55 (0.2)
(in US cents)
Exceptional items:
Reversal of provision on available - - 0.76
for sale investment
Basic and diluted earnings per share 0.1 0.55 0.56
(in US cents)
6. Other investments
On 21 May 2009, ZCI and ACU entered into and completed the Subscription
Agreement under which ZCI subscribed to 676,570,543 new ACU ordinary shares at
an issue price of GBP 0.01 per share for gross proceeds to ACU of approximately
USD 10 million. The Subscription Agreement will be voted upon for ratification
at the ZCI Shareholders General Meeting on 11 January 2010. At the time of the
offer, ZCI confirmed that it had received a comfort letter from Copperbelt
Development Foundation (CDF), which holds 72% of the issued share capital of
ZCI, that confirmed CDF`s intention to vote all of its shares in favor of all
resolutions required to approve the initial offer.
7. Trade and other receivables
Six Six months Twelve months
months
ended ended ended
30-Sep-09 30-Sep-08 31-Mar-09
Interest bearing loans receivable 21,280 - -
from ACU
Interest accrued on loans receivable 1,046 - -
Other receivables due from ACU 13,430 - -
Receivable due from Vedanta Plc - 5,220 -
Sundry receivables and prepayments 11 506 76
35,767 5,726 76
On 9 May 2009, the Group announced it had entered into agreements pursuant to
which ZCI agreed to provide African Copper Plc (ACU) with a financing package,
which was subsequently amended by further agreements with effective dates of 12
May 2009, 18 May 2009, 21 May 2009 and 19 June 2009.
The financing package comprises:
- the Initial Bridge Loan facility of US$7 million. The initial Bridge Loan
was made available to Messina (subsidiary of ACU) on 13 May 2009.
- the Second Bridge Loan facility of US$25.4 million. The Second Bridge Loan
was made available to Messina on 18 May 2009.
- the Share Subscription of approximately USD 10 million proceeds to ACU.
The Share Subscription was completed on 22 May 2009.
- the Convertible Loan Facility comprising a convertible Tranche A of
US$8,379,100 with a coupon of 12% per annum and Tranche B that is not
convertible of US$22,750,000 with a coupon of 14% per annum. The
Convertible Loan Facility was signed on 18 June 2009. Tranche A of the
Convertible Loan Facility is convertible into ordinary shares of ACU at a
conversion price of 1p per share.
The Convertible Loan Facility can only be used to refinance the Initial Bridge
loan and the Second Bridge Loan.
The advance of funds under the Convertible Loan Facility is subject to the
satisfaction of certain conditions, including that ZCI`s shareholders have
approved the Convertible Loan Facility and security over Messina`s assets,
including the Mowana Mine, has become effective. The security over Messina`s
assets has become effective and the Convertible Loan Facility has been
guaranteed by ACU and all ACU Group companies. The ZCI shareholders will
address approval of the Convertible Loan Facility at the ZCI shareholder`s
meeting on 11 January 2010.
In addition to the financing package, ZCI entered into the following
acquisitions of ACU trade payables:
On 11 May 2009, ZCI, ACU, and ACU`s mining contractor Moolman entered into an
agreement by which the outstanding debt owed by Messina to Moolman (the Moolman
Debt) of Pula 60 million plus VAT (approx USD 8 million) was assigned to ZCI at
a price equal to 50% of the face value of the Moolman debt.
On 12 May 2009, ZCI and ACU`s engineering procurement contractor Senet entered
into an agreement whereby Senet assigned to ZCI it`s ZAR 17,002,545
(approximately USD 2 million) outstanding debt owed by Messina (the Senet debt)
for a price equal to the 50% of the face value of the Senet Debt. ACU repaid
the full amount of the Senet debt to ZCI during the period ended 30 September
2009.
On 21 May 2009, ZCI completed a compromise agreement with ACU`s trade creditor
Read Swatman and Voigt (pty) Limited (RSV) by which ZCI paid to RSV an amount of
ZAR 3,777,836 (approximately USD 0.4 million ), computed as 50% of the ZAR
4,537,525 which the ACU Group owed directly to RSV and 100% of the ZAR 1,509,374
which the ACU Group owed to RSV subcontractors. Pursuant to the agreement, the
full amount of the RSV debt, ZAR 6,046,899 (approximately USD 0.7 million), was
assigned to ZCI.
Until such time as the financing package and the debt acquisitions are approved
by the ZCI Shareholders, all amounts owed by the ACU Group are currently due and
payable.
8. Income tax
Taxation expense is a cost of the former subsidiary, ZCI Holdings S.A., a
company incorporated in Luxembourg. This subsidiary was formed as a holding
company with "milliardaire" status under the Luxembourg Law of 1929. It was
exempt from income tax on profits, but was subject to a minimum annual taxation,
assessed at a fixed rate based on the issued capital, equivalent to EUR 48,000.
This subsidiary was dissolved in June 2009, resulting in no gain or loss for the
Group.
9. Subsequent events
The Company issued a Circular to Shareholders dated 17 December 2009 to call a
meeting of the Company`s shareholders on 11 January 2010. The meeting is being
held to, among other things, approve and ratify the Share Subscription by ZCI
for 676,570,543 new ordinary shares in the capital of ACU which completed on 21
May 2009, the USD 31,129,100 Term Loan Facility granted by the Company to ACU`s
wholly-owned subsidiary Messina Copper (Botswana) (Proprietary) Limited pursuant
to the agreement dated 18 June 2009, and ZCI`s purchase of certain outstanding
trade payables owed by ACU.
CHAIRMAN`S STATEMENT
I am pleased to present the Company`s condensed consolidated interim financial
statements for the six months ended 30 September 2009. The results are a
reflection of the challenges that faced the Company on entering an extremely
important phase in its history.
On 21 May 2009, as a direct result of the implementation of the Company`s
business plan, ZCI subscribed for and obtained 676,570,543 ordinary shares of
African Copper Plc, a company incorporated according to the laws of England and
Wales, which holds exclusive rights for the exploration and development of ore-
rich copper deposits in Botswana.
ZCI will seek shareholder approval for this transaction on 11 January 2010 and
once obtained, the company`s classification as a cash shell will effectively
cease, entitling it to be re-listed on the non ferrous metal section of the main
board of the Johannesburg Stock Exchange in mid-January 2010.
The essential features of the transactions are fully described in the Circular
to Shareholders and are supported by a Competent Person`s Report as required by
the JSE Listing requirements. The circular, which includes an executive summary
of the CPR, is available on the company`s website www.zci.lu and forms the basis
for a positive outlook for the Company`s future economic performance.
From a financial perspective, the company recorded a result of USD 54,000 profit
for the six month period ended 30 September 2009. This is a direct consequence
of the finance income earned being offset by normal operating expenses and the
expenses incurred in preparing the Circular to Shareholders and the other
ancillary professional reports.
I also take this opportunity of formally welcoming Kathryn Bergkoetter to the
Board of Directors of the Company as Financial Director. Ms Bergkoetter`s
appointment was made in compliance with the Johannesburg Stock Exchange Rules
and we are sure that her experience and expertise will be an advantage to the
Company as it faces the challenges of the new year, not least of which will
include bringing ZCI`s new acquisition to a positive cash-flow position.
It is thus on a note of optimism and determination that ZCI looks to the year
ahead, in the belief that it is both strategically and financially placed to
aggressively re-list its shares on the Johannesburg and Paris Euronext
Exchanges.
Tom Kamwendo
Chairman
Bermuda
29 December 2009
Company Secretary
John Kleynhans
Registered office
Clarendon House, 2 Church Street, Hamilton, Bermuda
Transfer Secretaries
Computershare Investor Services 2004 (Pty) Limited, 70 Marshall Street,
Johannesburg, 2001 South Africa
Sponsor
Bridge Capital Advisors (Pty) Limited, 72 Fricker Road, Illovo Boulevard,
Illovo, 2196 South Africa
Date: 31/12/2009 12:00:01 Produced by the JSE SENS Department.
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