By HELEN ZULU –
ZAMBEEF Products has agreed to sale its wholly owned subsidiary Zamanita Limited to Cargill Holdings at a cost of US$25.7 million.
Zamanita is one of the largest edible oil and soya-bean meal producers in Zambia, serving both domestic and export markets as well as selling into the domestic refined oils market.
Zambeef chief executive officer (CEO) Francis Grogan said in a statement released in Lusaka that following completion of the deal Cargill would assume sole ownership of Zamanita’s intellectual property rights along with its remaining assets and debts.
Mr Grogan said the disposal would allow Zambeef to focus on growing its core business, which was the retailing of cold chain meat and dairy products, delivered through the Group’s extensive processing, distribution and retail network.
He said the disposal would allow Zambeef to unlock value, through a reduction in overall gearing and reduced exchange rate exposure and interest costs.
“We have agreed to dispose of Zamanita to Cargill Holdings at a cost of US$25.7 million payable on completion date. The completion date is scheduled for May 1, 2015 or the first day of the month following the satisfaction of the Conditions Precedent,” Mr Grogan said.
Zambeef acquired Zamanita at a cost of US$16 million in January 2008, as a continuation of its strategy of vertical integration.
In addition to its position as a leading edible oil and soya-bean meal producer, Zamanita owned the only solvent extraction plant in Zambia.
He said following the disposal, there would be no change to the Group’s board of directors or senior management team and its operational focus would also remain unchanged.
He said on completion of the business transaction, Zambeef would transfer 100 per cent of Zamanita’s issued share capital to Cargill adding that Zamanita would be acquired by Cargill with the existing Standard Chartered Bank Zambia Plc bank debt and encumbrances, which as at September 30, 2014, were approximately K169.4 million.
The SPA excludes from the disposal, the potential Zambia Revenue Authority (ZRA) tax liability initially announced on February 3, 2012, of K54.6 million for which Zambeef will assume full responsibility pending completion of the ongoing determination proceedings.
