Friday, June 21, 2024

Zambia Copper, Natasa sweeten bids for African Copper

To show the seriousness of the Mowana copper mine to the bidding war between the two suitors of African Copper, one of the bidders has revealed that it has already transferred funds to a trust in the UK.

On the other hand, Natasa has agreed to issue to bondholders a total of 4,518,737 new ordinary shares of 10p each.

Zambia Copper Investments (ZCI) said this week in an e-mailed statement to Sunday Standard it has improved its bridge loan facility offered it from $2.5 million to $10 million that will please many shareholders and, may be, cheer its share price.

This sweetened offer challenges the statement made by another suitor – Natasa Mining Ltd, which said last week that the bridge loan could not clear debts it is owed by African Copper.

“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 have 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.

Although Natasa has warned that, should shareholders of African Copper plc vote against the resolutions to be put to them at the EGM to be held on 7 May 2009, it might lead to a strong possibility of a liquidator to be appointed to Messina Copper (Botswana).
ZCI said shareholders should vote against the resolutions.

Meanwhile, Natasa’s argument is that it has legal agreements with African Copper. Therefore, African Copper said, in view of these legal agreements entered into with Natasa Mining Limited that were announced by the company on 9 April 2009, it will not respond to the ZCI offer prior to the completion of the Extraordinary General Meeting.

Meanwhile, African Copper said on Labour Day that it has received a further offer from Natasa in addition to the agreement made on 9 April.

As part of the bondholder proposal, the company has agreed to issue to bondholders a total of 4,518,737 new ordinary shares of 10p each.

Conditional upon approval of the Natasa Proposal at the EGM, Natasa has offered to acquire from bondholders 2,239,034 of the new ordinary shares to be issued to them for an aggregate consideration of approximately US$1 million cash which is equivalent to approximately 30p per share.

Also Natasa has offered to arrange for Messina Copper to issue (in exchange for a subscription by Bondholders), a new bond on the same terms as the existing bond issued to Bondholders in an amount denominated in Botswana Pala equivalent to US$2.5 million.

The offer to bondholders is capable of acceptance, in part or in whole, the company said.

African Copper said that should bondholders accept the proposal from Natasa in full, the effect on the Company would be that Natasa would increase its percentage shareholding in the Company from 70% to approximately 80%.

Equally, African Copper would have issued an additional US$2.5 million of debt in comparison to that contemplated in the Bondholder Proposal contained in the 9 April Announcement.

The offer is conditional upon shareholders approving the proposed transaction with Natasa, which will be voted on by shareholders at the Company’s extraordinary general meeting (EGM) convened for 7 May.


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