Business
Disposal of 90% shareholding in Zampalm Limited
Disposal of 90% shareholding in Zampalm Limited.
About this update from Zambeef Products Plc
[{"type":"text","content":"\n \nRNS Number : 0044Q Zambeef Products PLC 06 September 2017 \n\n6 September 2017\n \n \nZambeef Products plc\n(\"Zambeef\" or the \"Group\")\n \nDisposal of 90 per cent. shareholding in Zampalm Limited \n \nZambeef (AIM: ZAM), the fully integrated cold chain food processing and retailing group with operations in Zambia, Nigeria and Ghana, announces that it has entered into a Share Sale Agreement, a Shareholders' Agreement and a Management Agreement (together, the \"Agreements\") with the Industrial Development Corporation of Zambia Limited (\"IDC\") for the sale of 90 per cent. of Zambeef's shareholding in its wholly owned subsidiary, Zampalm Limited (\"Zampalm\") to IDC for a cash consideration of USD16 million (the \"Consideration\") (the \"Transaction\"). For more information on IDC, please see the notes section. \n \nTransaction Overview\n· Disposal of 90 per cent. of Zambeef's shareholding in Zampalm (after loan capitalisation, as referred to below) to IDC for a total cash Consideration of USD16 million.\n· USD16 million cash to be paid on completion, with a further Performance Amount of up to USD2 million dependent on performance milestones over the three years from 2018 to 2020.\n· Disposal is aligned with the Group's strategy of focusing on its core business of the production and retailing of cold chain meat and dairy products, cropping and stockfeed.\n· Proceeds will be used to further pay down the Group's debt and thus reduce gearing and interest costs.\n \nBackground\nZampalm was incorporated in 2009 following Zambeef's acquisition of Zamanita Limited (\"Zamanita\") in order to develop an oil palm plantation and crushing mill in Zambia as a continuation of its strategy of vertical integration. \n \nIn addition to its position as a leading edible oil and soybean meal producer, Zamanita also owned the only solvent extraction plant in Zambia. \n \nIt is estimated that 50%-70% of Zambia's edible oil consumption of approximately 120,000 M.T. per annum is imported as finished edible oil from the Far East, East Africa and South Africa. Zampalm was created to substitute those exports and produce palm oil entirely in Zambia for the domestic ma...