Zambeef has announced that the completion of the sale of Sinazongwe Farm to Chenguang Biotech transaction has been delayed due to the Coronavirus (COVID-19) outbreak, according to a statement from the company.
“Further to the Company’s announcement of 17 September 2019 and 13 March 2020, Zambeef, the fully integrated cold chain food processing and retailing group with operations in Zambia, Nigeria and Ghana, announces that it has entered into a Second Side Agreement with Chenguang Biotech (Zambia) Agri-Dev Limited (“Chenguang”) extending the Completion/Long-Stop date for the Sinazongwe Farm disposal (the “Transaction”) from 7 April 2020 to 24 April 2020”, read a statement issued on SENS by the company on 7th April 2020.
The Coronavirus outbreak has disrupted global business and many financial transactions that were due to close have been either put on hold or suspended.
“Zambeef has duly fulfilled the Conditions Precedent as set out in the binding sale and purchase agreement (the “SPA”) and is ready to complete the Transaction”, further read the statement from the beef processing company. “Chenguang, however, has advised the Company that it is unable to complete the Transaction on the Completion Date of 7 April 2020 due to the Corona virus pandemic resulting in a delay in converting the balance of the Purchase Price in the sum of USD9,000,000 from Chinese Yuan into US Dollars, and then transferring the same to Zambia”.
At the time of publishing this article, many governments across the world were extending the lockdown period. For Zambia, President Edgar Lungu announced just before the Easter weekend that Zambia would see an additional 2 weeks of lockdown as the Ministry of Health battles to contain the spread of the virus.
Despite all other Conditions Precedents as set out in the SPA have been satisfied by both parties, the transacting parties now enter into a Conditions Subsequent. “The Condition Subsequent set out in the Addendum Agreement (as announced on 13 March 2020) relating to Zambeef’s obligation to obtain the subdivision of approximately 20 hectares of the Remaining Extent of Farm No 4906 (Feedlot and Abattoir) has also been extended from 29 May 2020 to 19 June 2020.”
Based on the aforementioned, “the parties have therefore agreed to extend the Completion Date to 24 April 2020, in accordance with the terms in the Second Side Agreement, which also states that the balance of the Purchase Price shall now be paid by Chenguang to Zambeef as follows:
- a) USD3,000,000 to be paid on or before 10 April 2020; and
- b) USD6,000,000 to be paid on or before 24 April 2020 (“Final Instalment”)”.
“Completion of the Transaction shall be subject at all times to Zambeef receiving the Final Instalment. Zambeef shall only deliver to Chenguang the completion documents set out in the SPA after payment of the Final Instalment has been received”.