Written by Founder Fi
During the last six months of the 2020 financial half-year of ZCCM IH, a proposal was tabled that would see the investment group reduce its stake in banking and milling.
According to sources close to the matter, ZCCM IH has been in the process of recrafting their strategic plan. This refinement in strategy comes with the blessings of IDC who are the parents of the investment group.
“Industrial Development Corporation (IDC) Group CEO Mr Mateyo Kaluba has said ZCCM-IH will take up a more active role as an investor in the mining sector rather than being a holding company for the Government’s minority shares”, read a statement published on the ZCCM IH website after the IDC CEO toured Kabundi Resources Limited mine, ZCCM-IH’s manganese mining operation in Serenje district.
This was a very strong signal that indicated that IDC along with ZCCM IH would seek out a strategic path that would see IDC increase its investment umbrella by snapping up ZCCM IH’s banking and milling interests.
According to a SENS announcement published on 1st October 2020, through the IDC Reorganization Transaction initiative, the Board of ZCCM-IH considered and approved the proposed IDC/ZCCM-IH Group reorganization exercise whereby:
- IDC transfers its 25% equity stake in Kagem Mining Limited, at fair market value, to ZCCM IH;
- ZCCM-IH transfers its 71.4% equity stake in Investrust Bank PLC, at fair market value to IDC; and
- iii) ZCCM-IH transfers its 100% stake in Mushe Milling Limited to IDC at fair market value.
These 3 corporate actions listed above will be undertaken simultaneously as a corporate group reorganization exercise involving IDC and ZCCM-IH and constitute the proposed Group Portfolio Rationalization and Reorganization.
Based on the IDC CEO’s statement, it can be deduced that the stars are being aligned for ZCCM IH to increase its focus on mining whilst reducing its arm of influence over sectors that have potential to be a distraction. What this entails is ZCCM IH seeking out a healthier chunk in shareholding for mining assets that become available over the near and long term.
No doubt CEO Mabvuto Chipata will be aligning his charges and ensure that they apply their skills sets on the refined strategic mandate that is beginning to unfold.