ZAMBIA – Zambia’s integrated agro-processing and retailing group Zambeef has announced that it is selling 90% of its shareholding in Zampalm Ltd for US$16 million to the Industrial Development Corporation of Zambia Limited (IDC), to focus on its key growth areas.
Zampalm owns a palm oil plantation and a crushing mill in northern Zambia, and has been a wholly owned subsidiary of Zambeef. It is the leading edible oil and soybean meal producer in the country.
Zampalm, which has been contributing less than 1% of the Zambeef’s income, was created to substitute edible oil imports and produce palm oil entirely inZambiafor the domestic market.
“The Board has reviewed its strategy for Zampalm and concluded that given the long timescales required to create value from a greenfield project, it was in the best interests of Zampalm stakeholders to seek a new majority shareholder,” Zambeef said in a statement.
In the deal, Zambeef has decided to dispose of the oil miller to IDC, an investment company wholly owned by the Zambian government, which plays a catalytic role in deepening and supporting Zambia’s industrialisation capacity to promote job creation and domestic wealth formation.
The company says that the deal will enable it to focus on its core business of the production and retailing of cold chain meat and dairy products, cropping and stock feed.
It will also allow the leading agro industry enterprise to further pay down the group’s debt and reduce gearing and interest costs.
IDC will pay the total amount of US$16 million on completion of the process, with a further performance based payment of US$2 million.
Zambia has an approximate annual demand for edible oil of 120,000 metric tonnes, of which 50-70% is imported from the Far East,East Africa and South Africa.
The deal is subject to approval by the Zambia Competition and Consumer Protection Commission.
September 6, 2017