Following Copperbelt Energy (CEC Plc) disposing off its 50% shareholding in CEC Liquid Telecommunication Limited (CEC Liquid Telecom) to pan-African telecoms group, Liquid Telecommunication Holdings Limited (Liquid Telecom) in October 2018, investors in the company waited with baited breath for the CFO through his subcommittee on the board to conclude deliberations for the submission of the recommended special dividend from the proceeds of the sale.
The announcement that came on 1st February 2019 of a special dividend marked a four month wait for investors. The Board of CEC approved the payment of an interim dividend of US Cents 1.9 per ordinary share which translates to ZMW 0.2267 per share according to the SENS announcement that was issued.
Investors such as ZCCM IH which has shown intent on increasing its energy investment by increasing its shareholder by 4% in November 2018, will be pleased with this development as they bought the shares at an appropriate time that will see the investment group benefit from the announcement windfall.
IDC owned ZCCM-IH now owns 24 per cent shares acquired in the November 2018 transaction. At 1.6 Billion shares in issue, ZCCM IH now owns a staggering 390 thousand shares. This translates to their payment on 4th March 2019 (the effective date of payment for the dividend) US$ 7.41 million or K 88.4 million at an exchange rate of 11.93 kwacha to a dollar.
A recap of the rationale of the investment indicates that CEC entered into a Joint Venture with Liquid Telecom as equal partners in 2011. However, 8 years later, the Owen Silavwe led management team backed by the management’s belief system of entering into a telecommunications union with Liquid Telcom led them on a path that saw the entities assets attaining the desired commercial status that was in their strategy.
Although the company does not provide clear indications as to why divesture happened last year in their statement on the disposal, Liquid Telcom’s generous acquisition now sees investors having a handsome windfall in the early months of 2019.