THE announcement that more than 15 million government’s shares in ZCCM Investment Holding (IH) were offered to National Pension Scheme Authority (NAPSA) through the Lusaka Stock Exchange (LuSE) has reignited public interest.

The public interest in last week’s announcement is justifiable considering that almost 28 million more shares are yet to be offloaded on the same bourse for the local individuals and companies to buy.

This move marked the beginning of government’s process of reducing its shareholding in ZCCM IH by selling down 27.5 per cent of its shares in the company, to empower Zambians and Zambian firms economically.

According to the 2015 national budget, the Government will sell 27.5 per cent out of its 87.5 per cent shares in ZCCM-IH to the Zambian citizens as a way of entrenching economic independence.

Following last week’s announcement I have been inundated with queries on how citizens can buy some of these shares.

To ensure clarity I want to restate that in my writing I represent neither the LuSE nor the ZCCM IH and that I obtain the information through independent research.

That said, I would like to revisit an article which we featured on November 26 2014.

In that article I said the government will offload more than 44 million of its shares in the ZCCM IH to the members of the public through the LuSE.

Following the first article on the matter, readers had been writing and calling in to find out more.

For instance, Mr John Misumbi had written from the Copperbelt Province on October 29 2014 saying:

How does someone like me purchase or acquire shares in listed company like ZCCM-HI or any other company?

Just this week, Mr Emmanuel Kasonde e-mailed from Copperbelt saying:

“I would like to find out where I can find the broker who can give me details regarding the sale of shares at ZCCM HI. I am staying in Luanshya.”
Others have, equally, called to inquire more about the issue.
To respond to those readers and other followers, I had decided to come up with the article on the matter for some more information.
To start with, LuSE listing regulations stipulate that no single shareholder should control more than 75 per cent of the equity in any company.
This is to ensure that more of the citizens take part in the capital markets in the country.
So, Finance minister Alexander Chikwanda had last year directed the Securities and Exchange
Commission to ensure that all listed companies comply with that requirement.
On its part, the Government resolved to reduce its shareholding in ZCCM IH to 60 per cent from the current 87.5 per cent.
Hence the 27.5- per cent shares which are now being sold to Zambians!
That decision followed a debt settlement agreement between the government and ZCCM-IH signed on March 25 2014 in which ZCCM-IH’s net indebtedness of K1,829,298,173.06 to the government was converted into equity.

This satisfied the issuance and subscription for the 87.5 per cent of the new rights offer shares by the government.
To adeptly handle the questions I had been receiving from the readers, I sought the expertise of the LuSE and Stockbroker Zambia (SBZ) on the matter.
My research findings from the two entities showed that ZCCM-HI’s total shares were about 160.8 million and the 27.5 per cent which the government intended to offload to the public through LuSE translated into 44, 252,238 shares SBZ indicated then that members of the public who were willing and able to purchase ZCCM-IH shares, even before the floatation of the additional 27.5 per cent, were at liberty to approach the nearest broker on how to purchase the shares.
Apart from the then pending 27.5 per cent shares which would be floated by the government at that time ZCCM-IH had a LuSE free-float of 12.5 per cent.
The 12.5 per cent shares followed the raising of fresh capital on the 12.5 per cent portion of the rights offer, for shares owned by the minority shareholders, which was underwritten by NAPSA on a claw-back basis.

According to SBZ, the citizens could participate by visiting any of the LuSE brokers to open up a brokerage account and purchase the shares.
The broker will advise on any further requirements but it suffices to state that all Zambian citizens are most likely to be given first priority.

This is just indicative and not set in stone. ZCCM-IH is still going through its internal processes to finalise how best they can offer these 27 per cent shares to investors,

SBZ had stated in a response to my query.

Another critical question was that of the minimum amount which one could require to participate in this and any other share acquisition.
To open a brokerage account one requires a minimum amount of K256, which means that the initial investment is likely not to go below that amount.
According to LuSE tranche one of the Government’s sell-down of 15,850,631 shares out of its total 43,811,868 ‘B’ shares in ZCCM-IH transacted in one trade.
It resulted in a turnover of K570,622,716 and a simple calculation shows that each share cost K36.
That leaves almost 28 million shares which can be bought by Zambians.

Zambia sold a 571 million kwacha ($79 million) stake in its mining investment company to the national pension fund as the government seeks to plug a growing budget deficit.

Zambia’s National Pension Scheme Authority bought the 15.9 million shares the government sold in ZCCM Investments Holdings on Tuesday, David Chewe, investment director at the fund, said in an e-mailed response to questions on Wednesday. The Lusaka Stock Exchange announced the government’s sale of the shares yesterday.

The deal is the first step in Zambia’s planned reduction of its stake in ZCCM-IH from 87.5 percent to 60 percent. The proceeds will help to cover a fiscal gap forecast by the International Monetary Fund to climb to 7.7 percent of gross domestic product this year.

It’s a milestone in our country’s history,” ZCCM-IH Chief Executive Officer Pius Kasolo told reporters in Lusaka Wednesday. The company’s shares are “the best performing on the Lusaka Stock Exchange,

he said. “They’re really sought after.”

ZCCM-IH, based in Lusaka, the capital, holds minority stakes in the local units of companies including First Quantum Minerals Ltd., Glencore Plc and Vedanta Resources Plc. The company is the successor to Zambia Consolidated Copper Mines, which held the government’s stakes in the country’s copper operations after they were nationalized.

NAPSA bought the shares at 36 kwacha each, according to calculations by Bloomberg, representing a 10 percent discount to the price of ZCCM-IH shares on the Lusaka Stock Exchange. NAPSA added to its holding of 8.3 million shares it acquired in July through underwriting a rights issue the company held. Its combined shareholding amounts to 15 percent of ZCCM-IH’s ‘B’ shares, according to calculations by Bloomberg using data on the mining investment’s company’s website.

The Zambia Consolidated Copper Mines Investment Holdings, the country’s forerunner to Zambia Consolidated Copper Mines (ZCCM) has Dr. Pius Chilufya Kasolo as the new Chief Executive Officer of ZCCM-IH, effective 1 October this year, taking over from Mukela Muyunda.

The appointment of Kasolo by the ZCCM IH board, a PhD holder in Economic Geology from the University of Southampton, United Kingdom as well as an MSc in Mineral Evaluation from Nancy Ecole de mine, France comes into effect from 1 October this year, the company says in a statement posted on its website.
Kasolo also holds a BSc in Geology from the University of Zambia. He holds various other business and technical qualifications. Kasolo has over 20 years experience in the mining sector as a consultant and at senior management level, during which he has worked in, and provided consultancy services to, organisations with major international mining interests.

He has undertaken various high level research studies, consultancy assignments and evaluations in the mining industry and other business sectors for the European Union, BHP, the University of Southampton and the Zambia Revenue Authority among others.

Kasolo has held various senior positions in the mining industry including that of Exploration Manager for JCI Limited of South Africa (then Part of the Anglo American Corporation) covering various countries namely Ivory Coast, Burkina Faso, Senegal, Ghana, Mali and Gabon.

Kasolo has served as Director on several companies in Africa including Firestone an Australian Listed company, according to a statement by Cosmas Mwananshiku, the ZCCM IH NON-Executive Director.

Before Kasolo’s appointment, the incumbent was the owner and Chairman of Zambezi Holdings, a diversified Investment company and Chief Executive Officer for Zambezi Mining Services (a concrete lining products firm based in South Africa).

The Board takes this opportunity to congratulate and welcome Dr. Kasolo and is confident that he will contribute greatly towards the achievement of ZCCM-IH’s vision to become Zambia’s leading investment company.

Dr. Kasolo takes over from Mukela Muyunda who was ZCCM-IH’s CEO until 7 August 2014. The Board commended Kasolo’s predecessor, Muyunda for his valuable contribution to the Company during his tenure of office and wished him success in his future endeavors.

Business Week reported that Kasolo had before his appointment by ZCCM IH served as senior exploration geologist for SAMAX Resources Ltd. He is also a geologist and consults to a professional group on project evaluation and labour planning, it adds on its website.

Kasolo has extensive experience in the evaluation and management of mining projects, the formulation of company strategy, resource optimisation and business process analysis.

He worked in London as a consultant geologist for BHP Minerals International Exploration Inc.

He served as senior exploration geological consultant to the European Union (EEC). He has worked for JCI in South Africa and West Africa, as well as for Anglo American as consultant geologist. He serves a Director of Mmakau Mining (pty) Ltd.

Kasolo served as a Non-Executive Director at Firestone Energy Ltd. since January 28, 2011. He has also published various papers on geology.

Source: Zambia Informer

Zambia Consolidated Copper Mines Investment Holdings, the London, Lusaka and Euronex listed group paid US$40 million in dividends to shareholders as share value rose.

The dividend of K1.56 per share to be paid to its shareholders since the company’s formation in 2002, the forerunner to Zambia Consolidated Copper Mines (ZCCM), entails that the owners or shareholders will pocket a total of K25,000,000 (US$40 million) next month during the share pay out, the company said in its report to shareholders during an Annual General Meeting held in Lusaka, Oct. 7.

The remittance of the dividends will be paid to shareholders on or before 7 September this year was achieved after the shareholders, Zambian Government inclusive made to convert the debt that the company owed into equity through the claw back rights offer process which was completed in March this year.

The claw back further entails that it eliminated the debt of K1.829 billion that made it difficult for the company to remit dividends to shareholders including the Government, which owns about 87 percent in the company. It further raised capital to K257 million and also repositioned the company to exploit investment opportunities to benefit the shareholders and the nation at large, the report stated.

The Capital Market further recognized the Company’s efforts to realign itself into a profit making venture as evidenced by the good performance in the share price, which this year alone, allowed the share price to jump to 134 percent, valuing the company at slightly over US$1 billion, making it one of the strongest companies trading its shares on the Lusaka Stock Exchange (LuSE) in capitalisation.

As at 2011, the share price had more than doubled to 300 percent, a remarkable return for the shareholders and with the dividend declared, the turn of events has been historical for the company that had for long grappled with escalating debts.
Earlier this year, the company considered the views and participation of the minority shareholders and decided to consider their participation in the company affairs and since appointed a non executive director, to serve their interests for the first time ever in the history of the company.

During the year 2014, the company revenue as a group rose 163 percent on the year, rising to K803,013,000 from a paltry K305,481,000 recorded a year earlier with profit after tax rising 57 percent to K892,657,000 from a low K567,925,000 earlier.
Total Assets rose 19 percent to K8752,010,000 from K7,359,067,000 reported last financial year, with the group revenue rising to K1,000,538,000 from K520,104,000 in 2013 with profit after tax recording in excess of K277,186,000 from K762,021,000 a year earlier, the report added.

“ZCCM IH is now well placed and poised for the future. With our mission to maximize shareholder value as our guiding principle, we aim to use our strong financial position to make sustainable investments that will continue to benefit our shareholders now and in future,” the report stated.

ZCCM Investments Holdings Plc (ZCCM-IH) is one of Zambia’s prime investments holdings companies with the majority of its investments in the copper mining sector of Zambia.
It is quoted on the Lusaka, London and Euronext Stock Exchanges. The Company’s shareholders are the Government of the Republic of Zambia (GRZ) with 87.6 percent shareholding and private equity holders with 12.4 percent. Minority shareholders are spread throughout the world in various locations.

ZCCM-IH is a successor company to Zambia Consolidated Copper Mines Limited (ZCCM Ltd).Prior to privatization in 2000, ZCCM Ltd was a consolidated copper mining conglomerate which owned and operated a number of mining divisions which at privatization were sold off as independent mining companies.

ZCCM Ltd was majority owned 60.3 percent by the Government of the Republic of Zambia, 27.3 percent by Zambia Copper Investments Ltd (ZCI), an associate company of Anglo American Plc and 12.4 percent by private investors.

Source: Zambian Informer