Zambia formally accepted the offer to offload more than 2% share equity in the Equinox Minerals Limited owners of Lumwana Copper Mines in north western province and Saudi Arabia with projections to earn more than USD 160 million in real returns.
Zambia Consolidated Copper Mines Investment Holdings, known as ZCCM IH said that the company’s board accepted the offer which will result in a cash realization in excess of USD 160 million. ZCCM IH owns a total 2.28% in Lumwana Copper Mines in Zambia and Jabal Sayid in Saudi Arabia as at March 21st 2011.
The initial investment for ZCCM IH cost USD 30 million in 2006 and therefore the potential return of investment is in excess of 400% during the period 2006 to 2011. If within 120 days after the date of the offer or such longer period as the court permit, the offer has been accepted by holders of not less that 90% of the outstanding shares at the Expiry Time excluding shares held at the date of the offer by or on behalf of the offeror or an affiliate or an associate of the offeror, the offeror shall, to the extent possible, acquire the remainder of the Shares from those shareholders who have not accepted the offer on the same terms as the shares acquired under the offer pursuant to the provisions of section 206 of the Canadian Business Corporation Act. This will in effect be compulsory acquisition.
The statement issued by its brokers, Stockers Zambia Limited sated June 1st 2011 added that the offer by Barrick Gold, the Canadian based and leading miner to all shareholders of Equinox represents an opportunity for ZCCM IH to realize value for its investment. Upon receipt of the funds from Barrick Gold, ZCCM IH will ensure that the funds are prudently managed while exploring all investment avenues within and outside of Zambia.
ZCCM IH noted as a listed investment company on the Lusaka Stock Exchange, ZCCM IH seeks to enhance value for its shareholders. The board and management of ZCCM IH will therefore ensure that the principle of realizing value for the shareholders is maintained in the daily operations. It advised shareholders to exercise caution when dealing in the company’s securities until a full announcement is made.
According to data, ZZCM IH’s interest in Equinox is registered on the Toronto Stock Exchange, the transaction involving Barrick Gold is being conducted according to the rules and regulations of Canada. An equinox mineral Limited is an international mining company that is dual listed in Canada and Australian securities Exchange. Equinox has 100% equity in Lumwana mine in Zambia and 100% interest in Jabal Sayid Copper and gold project in Saudi Arabia.
Barrick Gold Corporation, the Canadian company and leading gold miner in the world in terms of production, reserves and market capitalization, recently made an offer through its wholly owned subsidiary, Barrick Canada Incorporation to purchase all the issued and outstanding common shares of Equinox by way of negotiating the take over bid at a cash price of Canadian USD 8.15 per share.
Equinox, after consultations with its financial and legal advisors and on receipt of a recommendation of its special committee has unanimously determined that the offer is in the best interests of Equinox Board and unanimously agreed to recommend that shareholders accept the offer and deposit their shares under the offer.
Accordingly, Equinox Minerals Limited agreed to sale of its assets for a value of more than USD 7 billion. Analysts in Zambia however said the decision and transaction of Equinox Minerals to Barrick Gold defeats the essence of government retaining a stake in the mining companies run by foreign investment. Earlier, government indicated willingness to retain a minimum of 25% to 35% equity in the mines to safeguard jobs and other national interests.
(Filed by Mr Kapembwa Sinkamba SteelGuru Correspondent Zambia)
