Message Ven 17 Juil 2015 10:17

CEO’S UPDATE TO THE SHAREHOLDERS OF ZCCM-IH

 
CEO's update to the Shareholders 16-07-2015.pdf
Lettre du CEO aux actionnaires
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ZCCM INVESTMENTS HOLDINGS PLC
[Incorporated in the Republic of Zambia] Company registration number: 771
Share Code: ZCCM -IH ISIN: ZM0000000037
[“ZCCM – IH “ or the “Company”]
CEO’S UPDATE TO THE SHAREHOLDERS OF ZCCM-IH

_________________________________________________________________________________________________________________





This is the CEO’s update to shareholders of ZCCM-IH on recent developments in the Company.

GRZ sale down

The Lusaka Stock Exchange (LuSE) Listings Requirements stipulate that the minimum free-float required to be held by Public Shareholders should be at least 25%. Accordingly, no single shareholder should control more than 75 % of the equity in any company listed on the LuSE. To comply with the Listings Requirements, the majority shareholder in ZCCM-IH, the Government of the Republic of Zambia (GRZ) agreed, in 2014, to reduce its shareholding from 87.5% to 60.3%. The majority shareholder began the process to reduce its shareholding (GRZ Sale Down) through the sale of the first Tranche (i.e. Tranche 1) of shares to the National Pension Scheme Authority (NAPSA) of Zambia.

In this regard, Tranche 1 of the GRZ Sale Down was completed on 8 June 2015 in which 15,850,631 (representing circa 10%) shares out of the total 43,811,868 class ‘B’ shares (representing 27.5%) in ZCCM-IH were sold to NAPSA through a trade on the LuSE. This leaves a balance of 27,961,237 shares which will, initially, be offered to Zambian citizens and other eligible Zambian institutions in the next tranche of the Government sell-down. This is in line with the announcement by the Minister of Finance during his national budget address in October 2014 where he stated that the ‘B’ shares representing 27.5 % shareholding would be sold to Zambian citizens as a way of entrenching the economic independence of Zambians. The unsold shares will then be opened up to all interested investors, both local and foreign.

Shareholding structure

Following the completion of the sale of the first Tranche of GRZ shares in ZCCM- IH, the following shareholding structure has emerged:

ShareholderClass of SharesStatusNumber of Shares currently heldCurrent ShareholdingNumber of Shares to be held After completion of Tranche 2 saleShareholding After Tranche 2 sale
GRZANot Listed96,926,66960.28%96,926,66960.28%
GRZBListed27,961,23717.39%--
NAPSABListed24,120,04315.00%24,120,04315.00%
MinoritiesBListed11,792,3377.33%39,753,57424.72%
Total160,800,286100.00%160,800,286100.00%



The Directors’ Half Yearly Summary for the period ended 31 March 2015 (the Summary) was recently issued to the shareholders and the market. The Summary has information on the financial performance of the Company in the six months period ended 31 March 2015 compared to the same period in 2014. The Summary also has information on the strategic and operational developments in the Company. Shareholders are advised that the Summary can be downloaded from the Company’s website using the following link:

http://www.zccm-ih.com.zm/images/storie ... ts/dis.pdf

The Company also issued a Trading Statement which stated that for the interim period ended 31 March 2015, the basic earnings per share were expected to be 199% higher, and the headline earnings per share were expected to be 199% higher, than those for the interim period ended 31 March 2014. Shareholders are advised that the Trading Statement can be downloaded from the Company’s website using the following link:

http://www.zccm-ih.com.zm/images/storie ... ts/zts.pdf

Diversification Strategies
As part of strategies to diversify the Company’s portfolio and reduce its investment concentration in the mining sector, the Board recently approved inclusion of investment into the real estate and agriculture sectors in its 2016

Strategic Plan. This is intended to provide the Company with regular and predictable income that is aimed at maximizing shareholder value.

Maamba Collieries Limited (MCL) Thermal Power Plant

The Financial Close for the third party financing of the MCL coal plant and thermal power plant projects is expected to be concluded by the end of July 2015.

The thermal power plant project is expected to produce 300MW. The project is expected to be commissioned in June 2016. This project is expected to improve the profitability of MCL.

Outlook: Realising Value

ZCCM-IH is already the largest company by market capitalization on the Lusaka Stock Exchange with a value close to $1 billion. The Board and Management of ZCCM-IH is looking to reinvigorate the company and transform it from a passive receiver of dividends into a proactive investor in new projects and a dynamic engine at the heart of the Zambian economy.

In line with this approach, the Company’s Investments Directorate is being enhanced to actively monitor ZCCM-IH’s investments and identify new opportunities that would provide regular and predictable income.

The strategies and approaches highlighted above and many other activities are aimed at generating profits for the Company and thereby increase shareholder value.

Dr Pius C Kasolo
CHIEF EXECUTIVE OFFICER

16 July 2015
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