Circ re. Group Reorganisation Transaction

Particulars of the Transaction

Group Restructuring and Reorganization involving ZCCM-IH and the Industrial Development Corporation Limited

Conditions Precedent include:

· Various regulatory approvals, including LuSE, Securities and Exchange Commission, relevant competition authorities; and

· ZCCM-IH Shareholder approval.

Net Consideration:

US$ 19,000,000

The net payment shall be paid in the following manner and conditions as follows:

a) Two Hundred and Fifty Thousand United States Dollars (US$250,000) shall be paid by ZCCM-IH to IDC within Five (5) Business Days from the Group Re-organisation Completion Date;

b) Interest on the balance of Eighteen Million Seven Hundred and Fifty Thousand United States Dollars (US$18,750,000) (the "Net Difference Amount Balance") referred to at (c) below shall be payable in ten semi-annual instalments commencing one hundred and eighty two (182) days from the Group-Reorganisation Completion Date (the "First Instalment Date") and thereafter the remaining nine (9) instalments shall be paid no later than one hundred and eighty three (183) days from the date for payment of the previous instalment;

c) interest at the rate of LIBOR + Six Point Two Five Percent (6.25%) shall be payable on all or any amounts of the Net Difference Amount Balance outstanding (notwithstanding that such amount is not due) pursuant to (b) above;

d) in the event ZCCM-IH receives in cash any Extraordinary Income within Five (5) years from the Group-Reorganisation Completion Date exceeding Five Million United States Dollars (US$5,000,0000) ("Extraordinary Receipt") it shall pay Twenty Five Percent (25%) of such Extraordinary Receipt within Sixty (60) days of such receipt towards settlement of the outstanding amount of the Net Difference Amount Balance; and

e) In the event that any part of or all of the Net Difference Amount Balance has not been paid within a period of Five (5) years from {Date to be connected to (b)} then such part or all of the Net Difference Amount Balance shall no longer be payable by ZCCM-IH to IDC and IDC hereby waives its right to claim such amount in such circumstances.

Other terms of the Acquisition:

· IDC transfers its 25% equity stake in Kagem, at fair value, to ZCCM-IH;

· ZCCM IH transfers its 71.4% stake in Investrust, at market value to IDC; and

· Mushe Milling is transferred to IDC by ZCCM-IH at fair value or via a novation.

Rationale for the Transaction

· In order to achieve realignment, rationalisation and seize benefits of greater efficiencies, it is proposed that IDC transfers the Kagem asset to ZCCM-IH while ZCCM-IH transfers the Investrust and Mushe Milling investments to IDC via an arm's length transaction. The ZCCM-IH Board, therefore, considers that the proposed Group Reorganization and the subsequent acquisition and direct ownership of 25% shareholding in Kagem, Africa's largest emerald mine, will significantly enhance the investments portfolio of ZCCM-IH going forward and support the Company to sustain growth and unlock value for its shareholders.

Before

Pro Forma Adjustments

After

Percentage change (%)

EPS (ZMW)

11.87

0.43

12.30

3.62

HEPS (ZMW)

8.59

0.56

8.03

-6.52

NAV per share

130.60

0.4

131.00

0.31

Ordinary Shares in issue

160,800,286

160,800,286

0

 Shares in issue

160,800,286

160,800,286

0

Weighted average number of Ordinary Shares in issue

160,800,286

160,800,286

0

Sponsoring Broker

Transfer Secretary

Stockbrokers Zambia Limited

Corpserve Transfer Agents Limited

32 Lubu Road

6 Mwaleshi Road

Longacres

Olympia Park

P.O. Box 38956

Lusaka

Lusaka

Zambia

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Stockbrokers Zambia Limited (SBZ) is a member of the Lusaka Securities Exchange and is regulated by the Securities and Exchange Commission of Zambia

First Issued on 12 June 2021