Zambia Copper Investments (ZCI) said Tuesday that the financially embattled African Copper Plc has accepted its financial rescue following the latter’s decision to shoot-down proposals from Natasa.
Last Thursday, African Copper’s EGM, held in London, rejected Natasa Mining Limited’s proposal, paving the way for ZCI.
In a statement released Tuesday, ZCI said that as part of the debt acquisition agreement, all existing agreements with African Copper and Moolman ÔÇö the mining contractor ÔÇô have been terminated, including the mining contract in relation to African Copper’s Mowana Mine.
“In order to help secure African Copper’s future and accelerate bringing an important mine in Botswana community back into production, ZCI has agreed with African Copper that it will not seek repayment of the debt until at least the completion of the entire financing package,” ZCI said in a statement.
“The final effects of the offer and the debt acquisition will be incorporated into a circular to shareholders, setting out full details of the proposed transaction and incorporating the notice of the general meeting and for proxy; the circular will be distributed to shareholders in due course,” ZCI added.
African Copper, a London AIM, Toronto and Botswana-listed company, is operating Mowana Mine, which is about 100 kilometers west of Botswana ‘s second largest city, Francistown.
Last month, ZCI said it had already transferred funds to a trust in the UK. It stated that it had improved its bridge loan facility offered it from $2.5 million to $10 million and expected that this would please many shareholders and, maybe, cheer its share price.
“As an indication of the seriousness of its intent,” ZCI said in a statement, “ZCI has transferred the full $10 million amount of the bridge loan facility to its solicitors in London, McCarthy T├®trault, to be held in trust at National Westminster Bank plc, Fleet Street, London branch for the purposes of the implementation of ZCI’s proposal.”
ZCI said the improved offer will satisfy all repayment obligations to Natasa in full, removing the ability of Natasa to force the owners of Mowana Mine in Botswana into liquidation.
It will also pay African Copper’s bondholders and key trade creditors 50% of the total amounts payable to them under the ZCI terms in advance of the full implementation of ZCI’s proposal while protecting African Copper’s shareholders’ investment in Botswana.
“The full $22.5m offer from ZCI will satisfy bondholders and creditors and give shareholders in ACU the chance of significant upside in future operations,” it added.
Tom Kamwendo, Chairman for the ZCI, the Johannesburg Stock Exchange (JSE) and Euronext (Paris)-listed company, added that they had put transparent funds in place that creditors can and will be paid, according to the transaction timetable.
“We have blown Natasa’s offer and reservations out of the water. This package is quite clearly in advance of anything that they have come up with for creditors, shareholders and Botswana itself,” he said.