|ZAMBEEF SHAREHOLDERS APPROVE NEW CHICKEN DEAL BUSINESS
By Wallace Mawire
Zambeef Products shareholders have approved a deal that paves the way for the group to restore its Zamhatch and Zam Chick businesses to full Zambian ownership through a $23 million cash buy-back of shares from a South African joint venture partner, according to Gillian Langmead, Mangaging Director of Langmead and Baker Communications on behalf of Zambeef.
It is reported that shareholders agreed plans for the company to raise $65 million in new capital in order to take full ownership of the subsidiaries, as well as further reduce its debt levels and fund capital investment plans.
The transaction is also expected to lessen Zambeef’s exposure to exchange rate fluctuations.
The Zamhatch hatchery and Zam Chick broiler divisions were set up as joint ventures between Zambeef and RCL Foods in 2013, with Zambeef holding 49 percent of Zamhatch and 51 percent of Zam Chick.
Under the agreement, RCL of South Africa had an option to sell its shares back to Zambeef for cash or Zambeef shares equivalent to $14.25 million for RCL’s stake in Zam Chick and $9.126 million for Zamhatch.
Zambeef has opted to pay for the Zamhatch shares in cash, which has been raised through the issue of new ordinary shares and convertible preference shares to the world’s oldest development finance institution, CDC Group Plc (CDC).
Under the transaction CDC is investing $65 million in Zambeef, $9.5 million in return for 52.6 million ordinary shares and $55.5 million for 100 million convertible redeemable preference shares.
The investment gives the institution a 17.5 percent stake in Zambeef, which is listed on the Lusaka and London stock exchanges.
“We thank all our shareholders for their continued support for Zambeef. It is a measure of CDC’s confidence in Zambeef, its management and business model that one of the world’s most well-respected and prudent investment houses has opted to invest in the company,” said Zambeef chairman Dr Jacob Mwanza.
The move is also reported to be in line with the strategic objectives set out in the company’s annual report to focus on its core business of cold chain food processing and retailing, and expected to allow it to continue to roll out expansion of its distribution and retailing platform in Zambia and the region.
The National Pension Scheme Authority (NAPSA) to which every employee and employer in the country contributes is the single largest Zambian shareholder in Zambeef, owning some 25 million shares amounting to 10 percent of the company.
About Zambeef Products Plc
Zambeef Products Plc is one of the largest integrated food companies in Zambia and the region. The group is principally involved in the production, processing, distribution and retailing of beef, chicken, pork, milk, dairy products, eggs, stockfeed and flour. The group also has large row cropping operations (principally maize, soya beans and wheat), with approximately 8,120 hectares of row crops under irrigation which is planted twice a year and a further 8,480 hectares of rain-fed/dry-land crops planted each year producing 120,000 tons of grain annually. The group is also in the process of rolling out its West Africa expansion in Nigeria and Ghana.
The company slaughters around 58,000 beef cattle, 7.9 million chickens and 53,000 pigs per annum, while also processing 12.3 million litres of milk, producing 130,000 tons of stockfeed, 40 million eggs, 89,000 shoes and processes 99,000 hides in its tannery per year.. It has 150 retail outlets throughout Zambia and West Africa, along with four wholesale depots
Zambeef employs over 6,000 people with a total of ZMW231million paid in remuneration and benefits in the last year. Zambeef generated US$38m in US Dollar income and contributed ZMW128m to Government in taxes and duties.
More information is available at www.zambeefplc.com