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Lun 22 Nov 2010 09:51
Listing to empower 9,000 KCM workers
By NANCY MWAPE
THE listing of Konkola Resources Plc on the Lusaka Stock Exchange (LuSE) next year is expected to empower 9,000 of Konkola Copper Mines (KCM) employees through share ownership on the local market.
This listing will deepen the LuSE market, which currently has about 25,000 Zambian investors.
Stockbrokers Zambia Limited managing director Charles Mate said KCM is Zambia’s largest private sector employer, which will set pace for other mining companies to list on LuSE and accelerate capital market growth.
Mr Mate said this in Lusaka last Thursday during a media workshop organised by KCM when he presented a paper on The impact of KCM’s dual listing on London Stock Exchange (LSE) and LuSE.
“KCM is setting a pace for other mining houses to list on LuSE. The listing of Konkola Resources will accelerate capital market growth and development in Zambia,” he said.
Konkola Resources Plc is a 79.4 percent subsidiary of Vedanta Resources Plc and 20.6 percent subsidiary in ZCCM-Investment Holding Plc.
He said Zambia has registered huge investment in the mining sector, which is driving the country’s economic growth and creation of jobs, adding that the boom is also underpinning the stability of the Kwacha.
Mr Mate said Konkola Resources’ premium listing will be on the main board of LSE next month and subsequently on LuSE next year.
“We are going to LSE first because the domestic savings are not enough and London is hub of institutional investors. The listing of KCM is a demonstration that it is a successful company,” he said.
KCM hopes to raise US$1.1 billion from the sale of 25 percent shares on LSE and the proceeds will be used to repay Vedanta Group’s loan of US$500 million, payment of US$130 million to ZCCM-Investment Holding as settlement price participation agreement. The balance from the proceeds is intended for capital expenditure programme.
Mr Mate said the share price for Konkola Resources will be determined next month, while listing is estimated around December 15, 2010.
He said the London listing will be used to determine the share price for LuSE.
“The London prospectus will not have a fixed price on it but we will go through the process of scouting the market, talking to institutional investors, giving them information, allowing them to do their own analysis and valuation for the share price. Once the price is determined in London, we will try to shorten the period between the London Initial Public Offer (IPO) and the Lusaka IPO,” he said.
Mr Mate said the Zambian prospectus will come up with a minimum investment amount for the shares that can be set from K250,000 to K1 million.
He said the minimum investment required for local investors to buy Konkola Resources shares will address the issue of affordability. There will be need to sensitise Zambians on the importance of acquiring shares in KCM.
He said the local listing of Konkola Resources will contribute to domestic savings mobilisation and deepening of the capital market as well as allow the LuSE index to capture the mining sector.
“This year, we see inflows of portfolio investors buying Konkola shares. The listing of Konkola will test the depth of institutional investors’ pockets in Zambia,” he said.
