Zambian Copper Investments (ZCI) this week confirmed that it had made an offer to struggling African Copper, which the outfit claims rivals and is superior to other offers made by Natasa Mining Limited.
In an e-mailed statement to the Sunday Standard on Friday, the company said it had noted the announcement made on JSE that it has received an offer of finance from the Company (the “ZCI Offer”) and setting out certain terms of that offer.
Zambian Copper said the offer, which is not subject to additional due diligence is considerably more attractive than others.
It argues that the comprehensive US$22.5 million ZCI offer, consisting of equity and debt refinancing, is 50% greater than the US $15 million from a rival offer and includes a significantly larger (US$2.5 million) bridge loan facility.
Equally, it said, the offer would return significantly more cash (approximately US$8.8 million in total) to both bondholders and trade creditors and allows bondholders to retain a proportion of their bonds (US$2.5 million) giving an aggregate cash and bond offer of approximately US$11.3 million versus Natasa’s US$5.9 million.
The ZCI Chairman, Tom Kamwendo, said the board of ZCI is of the strong belief that our offer to African Copper is a demonstrably much more attractive proposition than the one tabled by rivals.
“The immediate availability of bridge financing to repay the Natasa bridge loan, the improved package for all stakeholders and the greater long-term investment in African Copper means that we are certain that the board of African Copper should be doing all that it can to make this deal available to African Copper creditors and shareholders,” said Kamwendo.
“This really is a deal in everyone’s interest where all parties can work together to create value.”
On the other hand, the ZCI offer would preserve far greater value for existing shareholders adding that ZCI provides ACU with a supportive, financially well resourced African centered mining parent, more likely to add further value to the company and its shareholders over the long-term.
The company said its directors are keen to enter into a dialogue with ACU to provide a quick and workable solution to ACU’s immediate financial difficulties that is in the best interests of all ACU stakeholders.
Meanwhile, African Copper said on Thursday that it has received an unsolicited offer of finance from Zambia Copper Investments Limited, which remains open for acceptance at any time prior to 20 May 2009.
However, the company that operates Mowana mine in Botswana said it will not respond to the offer before the extra ordinary meeting next month.
“In view of the legal agreements entered into with Natasa Mining Limited and announced by the company on 9 April 2009, the company does not intend to respond to the ZCI offer prior to the completion of the Extraordinary General Meeting (EGM) of the company, which has been slated for 7 May 2009 to approve the terms of the transaction reached with Natasa,” the company said on its website.
Natasa has informed African Copper that if the shareholders do not approve the terms of the Natasa transaction at the EGM, Natasa will move very quickly to enforce its legal rights under its existing US $1.5 million loan facility with the Company’s principal operating subsidiary Messina Copper.
On the other hand, if Messina is unable to repay such existing loan (which loan has been guaranteed by the company, Natasa will enforce its security and commence formal insolvency proceedings.
“In such event, it is unlikely that there will be any assets available for distribution to shareholders.”
ZCI is a Johannesburg Stock Exchange (JSE) and Euronext (Paris) listed, Bermuda incorporated, mining investment company. It previously owned 65 per cent of the Konkola Copper Mine (KCM) in Zambia but sold its residual stake in 2008 and is looking to invest in exciting African-based mining companies.
