Zambian Energy Corporation withdraws claim against CEC Africa
Copperbelt Energy Corporation Plc, Energy

The letter of demand that was issued to CEC Africa has been withdrawn following an agreement being reached with Zambia Energy Corporation, according to a statement from CEC Africa.

Shareholders of the Company are referred to the Cautionary Announcement first issued on 17 July 2020 in which Shareholders and the market were advised that the Company received a letter of demand from Zambian Energy Corporation (Ireland) Limited (“ZECI”) on 3 July 2020 for repayment of a loan of principal and interest amounting to USD 15,427,263=00 entered into by the Company on 20 November 2014”, read a statement issued by Clara Mvula, Head, Corporate Services on Thursday, 13th August 2020. “On 10 July 2020, the Company was served with court process documents indicating that ZECI would seek to recover the debt through the courts in Mauritius”.

On 10 July 2020, the Company was served with court process documents indicating that ZECI would seek to recover the debt through the courts in Mauritius. This is because the company’s investments have not gone according to plan. According to the article, in 2016, various factors have adversely affected the value of CEC Africa, including but not limited to:

  • Low power generation in Nigeria compared to Multi-Year Tariff Order forecast;
  • Liquidity challenges facing the Nigerian energy sector;
  • The effect of the depreciation of the Naira on CEC Africa’s USD debt obligations; and
  • Limited enforcement of the Nigerian power sector regulatory regime due to various factors.

According to the latest SENS announcement, “subsequent to the above development, shareholders and the market are now advised that the Company and ZECI have reached an amicable settlement and that the Notice of Statutory Demand issued by ZECI dated 13 July 2020 is hereby withdrawn”.

Out of goodwill, ZECI further indicated that they would not be following through with other rights the demand notice possessed. “Furthermore, ZECI has undertaken not to initiate any winding up proceedings pursuant to the said Notice of Statutory Demand”.

As CECA and ZECI have reached a settlement, caution is no longer required to be exercised by Shareholders regarding the Notice of Statutory Demand when dealing in the Company’s securities and the Cautionary Announcement in effect since 17 July 2020 is hereby withdrawn”.

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