ZAMBIA – Zambeef Products Plc has announced that it has completed the sale of its majority stake in its wholly owned subsidiary and oil producer, Zampalm Ltd to the Industrial Development Corporation of Zambia Limited (IDC) for US$16 million in cash.
Zampalm Ltd was incorporated in 2009, has some 409,506 palms planted on its plantation, supplies edible oil to industry players and provides oil palm plantation services.
Zambeef entered a share sale agreement with IDC for the sale of 90% shareholding in Zampalm for US$16 million, with Zambeef entitled to up to a further US$2 million in cash consideration, subject to certain performance milestones being achieved by Zampalm over the three years from 2018 to 2020.
“We are pleased to advise that all the conditions precedent to the Transaction were completed on 6 April 2018 and Zambeef has received the cash consideration of USD16 million,” said a statement from Zambeef.
According to Zambeef, the transaction is expected to result in the Group reporting a loss on disposal of a discontinued activity of about US$2.3 million.
The sale not only aligns with the company’s strategy of focusing on its core business but also allows Zambeef to pay down the group’s debt and thus reduce gearing and interest costs.
The company says after the disposal, it will now be in a position to concentrate on production and retailing of cold chain meat and dairy products, cropping and stock feed.
Zampalm is the leading edible oil and soybean meal producer in Zambia with a mandate to substitute 120,000 metric tonnes of edible oil per year imported as finished edible oil from Far East, East Africa and South Africa.
While noting on the recent appointment of Nelson Basaalidde as new manager for Zampalm’s outgrower scheme, Zambeef indicated that IDC’s shareholding in Zampalm complements the investment in Zambeef, to give every Zambian citizen a stake in the food processing and retailing giant.