The sale of Sinazongwe farm to Chenguang Biotech (Zambia) Agri-Dev Limited by Zambeef has now been completed following the payment of the final installment, according to a statement from Zambeef.
“Completion of disposal of Sinazongwe Farm Further to the Company’s announcements of 17 September 2019, 13 March 2020 and 8 April 2020, Zambeef, the fully integrated cold chain food processing and retailing group with operations in Zambia, Nigeria, and Ghana, is pleased to announce that it has now formally completed on the disposal of Sinazongwe Farm and received the final outstanding completion monies of USD6m”, read the SENS announcement issued by Zambeef’s sponsoring broker, Pangea Securities on 24th April 2020.
The sale of the asset was subject to a number of conditions precedents. The Zambeef Conditions Precedent included:
- Sub-division of the Feedlot and Abattoir (c.20 Ha) from the R/E of F4906;
- Obtaining state consent to assign the Properties – subject to receiving Chenguang’s Zambia Development Agency (“ZDA”) investment license;
- To the extent necessary, Zambeef shall notify and obtain the requisite approvals from the Lusaka Securities Exchange and the Zambian Securities and Exchange Commission;
- To the extent necessary, Zambeef shall obtain the consent of its lenders to effect the Transaction;
- Zambeef shall obtain shareholder approval for the Transaction (further details disclosed later in this announcement);
- Discharge the Deg-Deutsche Investtitions-Und Entwicklungsgesellschaft Mbh (“DEG Mortgages”) over the Properties/Farm;
- Approval of the Transaction by CDC Group plc;
- Approval of the Transaction by the Board of Zambeef.
As for Chenguang, the Conditions Precedent included Chenguang obtaining an investment license from the ZDA.
Finally, the Joint Zambeef/Chenguang Conditions Precedent was that the “Competition and Consumer Protection Commission (“CCPC”) provides either negative clearance or approval to the Transaction or if conditional approval is obtained, that the parties accept such conditions in writing within 14 days of receipt of CCPC’s notification”.
The payment for the asset was done in 3 tranches. “The total amount received is USD10m (USD1m on 17 September 2019; USD3m on 9 April 2020 and USD6m on 24 April 2020”.
With the transaction now concluded despite a minor Covid-19 caused delay, that saw the final tranche of the payment coming a week late, Zambeef can now go back to focusing on its core strategy. “As previously announced, the disposal of Sinazongwe Farm is a manifestation of the Group’s stated strategy to focus on its core business of producing and retailing cold chain meat and dairy products and stock feed”. As initially indicated in the earlier announcement of the transaction, Zambeef remains keen to reduce the debt stock it has. “The net sale proceeds will largely be used to pay down the Group’s debt and thus reduce gearing and interest costs”.