Further re Introduction of Strategic Equity Partner for Konkola Copper Mines plc
October 12 2004 - 3:49AM
UK Regulatory
1
Zambia Copper Investments
Limited
(Registered in Bermuda)
JSE code: ZCI ISIN:
BMG988431240
LSE code: ZCI Euronext
code: BMG988431240
("ZCI" or "the company")
FURTHER ANNOUNCEMENT IN RESPECT OF THE INTRODUCTION OF A STRATEGIC EQUITY
PARTNER FOR KONKOLA COPPER MINES PLC
1. Introduction
Shareholders are referred to the detailed terms announcement published on
20 August 2004 relating to the purchase by Vedanta Resources plc
("Vedanta") of a 51% equity stake in Konkola Copper Mines plc ("KCM") ("the
Vedanta investment").
2. Shareholders meeting
A general meeting of ZCI ordinary shareholders to consider the Vedanta
investment will be held at 10:00 on Tuesday 26 October 2004, at Hermes
Amphitheatre, Paris Expo Coeur Dfense, 110 Esplanade du Gnral de Gaulle,
92032 Paris La Defence Cedex, France.
3. Important dates and times
2004
Last day to lodge form of proxy for general Monday 25
meeting by 10:00 on October
General meeting of shareholders to be held Tuesday 26
at 10:00 on October
Results announcement published on Stock
Exchange News Service of the JSE Securities Tuesday 26
Exchange South Africa ("JSE"), London Stock October
Exchange and Euronext on
Results announcement published in the South Wednesday 27
African press on October
Notes:
1: These dates and times are subject to change. Any changes will be
published on SENS, LSE and Euronext and in the South African press.
2: These times are South African and Central European times.
4. Pro forma financial effects of the Vedanta investment
The pro forma financial effects of the transaction are set out below and
are based on the published unaudited interim results for the six month
period ended 30 June 2004. The pro forma financial effects are calculated
taking into account that post the Vedanta investment, KCM will no longer be
considered a subsidiary company of ZCI for accounting purposes. Therefore,
ZCI will no longer consolidate KCM and will treat it as an associate
company for accounting purposes.
The pro forma financial effects set out below do not necessarily represent
or indicate sustainable earnings or future profits of ZCI. Accordingly, the
pro forma financial effects set out below have been prepared for
illustrative purposes only.
Actual Pro forma Increase Increase
before after the / /
Not the Vedanta (Decrease (Decrease
e Vedanta investmen ) )
investmen t (%)
t
Earnings per 3 24.161 19.844 (4.32) (17.88)
ordinary
share
(cents)
Headline 24.161 19.844 (4.32) (17.88)
earnings per
ordinary
share
(cents)
Tangible net 5 57.831 51.312 (6.52) (11.27)
asset value
("NAV") per
ordinary
share
(cents)
Actual 6 126 197 126 197 - -
number of
ordinary
shares in
issue ('000)
Weighted 6 126 197 126 197 - -
average
number of
ordinary
shares in
issue ('000)
Notes:
The pro forma financial effects of the Vedanta investment set out above are
based on the following assumptions:
1. the earnings, headline earnings and tangible NAV per ordinary share
reflected in the "Before the Vedanta investment" column were extracted from the
company's unaudited results for the six months ended 30 June 2004;
2. the effect on tangible NAV per ordinary share reflected in the "After the
Vedanta investment" column assumes that the transaction was effective on 30 June
2004;
3. earnings per ordinary share are equal to fully diluted earnings per
ordinary share;
4. the effect on earnings and headline earnings per ordinary share reflected
in the "After the Vedanta investment" column assumes that the transaction was
effective on 1 January 2004;
5. there is no difference in the value for NAV per ordinary share and tangible
NAV per ordinary share as there are no intangible assets on the ZCI balance
sheet;
6. the number of ordinary shares is indicative only and is based on the
ordinary shares in issue at 1 January 2004;
7. the deferred consideration, payable by Vedanta, to be received from 2005 to
2008 was discounted to a net present value at 30 June 2004 and 1 January 2004
using a discount rate of 2.46% per annum;
8.the deferred consideration was amortised on a straight line basis over
the period from the effective date to December 2008;
9. ZCI had a 28.4% share in the KCM value increase resulting from
the $25 million cash injection into KCM;
10. due to its contingent nature the shortfall funding commitment,
provided by Vedanta pursuant to the terms of the Vedanta investment, has
not been included in the above calculations; and
11.the financial effects have been prepared on the basis of the non-
consolidation of the KCM Employee Share Ownership Trust ("ESOT"). The
directors of ZCI are of the opinion that the ESOT should not be
consolidated as it does not constitute a trust or scheme in terms of,
and therefore subject to, the provisions of Schedule 14 of the JSE
Listings Requirements.
5. Documentation
A circular setting out the terms of the Vedanta investment and containing a
notice of a general meeting of ZCI shareholders was posted to ZCI
shareholders on Monday 11 October 2004.
By order of the board
Bermuda
11 October 2004
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