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23 Apr 2013 10:42
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"]
ANNOUNCEMENT
The market and shareholders are advised of the following new developments relating to the Company.
PRICE PARTICIPATION SETTLEMENT AGREEMENT
WITH KONKOLA COPPER MINES PLC
ZCCM Investment Holdings Plc ("ZCCM-IH") and Konkola Copper Mines ("KCM") announce that they have entered into an agreement (the "Settlement Agreement") pursuant to which certain outstanding payments owed by KCM to ZCCM-IH and certain other contingent amounts payable, in each case, under existing price participation arrangements (the "Price Participation Agreements") which date back to March 2000 have been settled on the terms summarised below
Concurrently with the entry into the Settlement Agreement on 11 February 2013, the Price Participation Agreements dated 31 March 2000 were terminated.
The Price Participation Agreements were put in place at the time of the privatisation of Zambia's copper mining industry as part of the consideration and were designed to allow ZCCM-IH to benefit from an increase in the price of copper over the long term.
Due to the complex mechanics for calculating the amount due and payable under the Price Participation Agreements and the contingent nature of payments likely to arise in the remaining life of the Price Participation Agreements, the parties have worked to put in place a new agreement with an unconditional and clear payment plan.
Under the Settlement Agreement, US$46,324,655 is required to be paid by KCM (via installments) to ZCCM-IH on or before 31 August 2013, and a further US$73,420,000 (via installments) on or before 30 September 2016.
The total amount payable under the Settlement Agreement remains broadly unchanged (in dollar amount terms) from the amounts that were due and would likely have become payable under the Price Participation Agreements over time. However, ZCCM-IH considers the increased certainty of the payment obligations as additional cash-flow benefits that will assist ZCCM-IH in its day-to-day business operations and future investment plans.
Contact
For further information, please contact:
Mr. Chabby Chabala,
Company Secretary
Telephone: + 260 211 221023 / 220540
Email: cchabala@zccm-ih.com.zm
08 April 2013
Lusaka - Zambia
Sponsoring Broker
STOCKBROKERS ZAMBIA LIMITED
[MEMBER OF THE LuSE and REGULATED BY THE SECURITIES AND EXCHANGE COMMISSION OF ZAMBIA]
FIRST ISSUED on 08 April 2013
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