Message Jeu 11 Avr 2013 07:03

ZCCM-IH, KCM in settlement agreement 119 M US $

ZCCM-IH, KCM in settlement agreement

Posted by online editor on Apr 11th, 2013 // No Comment

ZCCM Investment Holding Plc and Konkola Copper Mine (KCM) have entered into a settlement agreement for the payment of over US$100 million debt owed to ZCCM-IH by KCM.
Under the settlement agreement,US$46,324,655 is required to be paid by KCM via instalments to ZCCM-IH on or before August 31, 2013, and a further US$73,420,000 via instalments on or before September 30, 2016.
Company secretary Chabby Chabala says the total amount payable under the settlement agreement remains broadly unchanged in dollar amount terms to ZCCM-IH from the amounts that were due and likely have become payable under the price participation agreements over time.
Mr Chabala said this in a statement released by Stock Broker Zambia Limited in Lusaka yesterday.
He, however, said the firm considers the increased certainty of the payment obligations as additional cash flow benefits that will assist ZCCM-IH in its day-to-day business operations and future investment plans.
Mr Chabala said the settlement agreement is pursuant to which certain outstanding payments owed by KCM to ZCCM-IH.
This includes certain other contingent amounts payable, in each case, under existing price participation agreements which date back to March 2000 have been settled on certain terms.
He said among other terms included concurrently with the entry into the settlement on February 11, 2013, the price participation agreements dated March 31, 2000 were terminated.
Other terms were the price participation agreements which were put in place at the time of the privatisation of Zambia’s copper mining industry as part of the consideration.
These were designed to allow ZCCM-IH to benefit from an increase in the price of copper over the long term.
Mr Chabala further says the parties have worked to put in place a new agreement with an unconditional and clear payment plan.
This is due to the complex mechanics for calculating the amount due and payable under the price participation agreements and the contingent nature of payments likely to arise in the remaining life of the price participation agreements,