ZCCM-IH to convert K2.1 trillion loans into equity .

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ZCCM-IH to convert K2.1 trillion loans into equity
Written by Online Editor
By NKOLE CHITALA
ZCCM-Investment Holdings (IH) Plc owes Government over K2 trillion in unpaid loans mainly arising from the restructuring programmes undertaken prior to and during the company’s privatisation in 2000.
However, Government has accepted proposals to convert all or part of the loans equity through a rights issue transaction.

According to a cautionary notice released by Stock Brokers Zambia Limited in Lusaka yesterday; the loans have placed a significant burden on the company with the result that ZCCM-IH has had a weak balance sheet from 2000.
“As at March 31, 2011, the ZCCM-IH financial statements reflected loans amounting to K2.139 trillion (approximately US$425 million) owed to Government,” it says.
The notice says majority of the loans are owed to Government and continue to be carried on the books of the company.
On the issuance of a rights issue, the notice says the company has been in discussion with the Government over the loans and recently Government accepted proposals to convert all or part of the loans equity through a rights issue transaction.
It says the main objective, amongst others, of the proposed debt equity conversion is to clean the ZCCM-IH balance sheet.
The ZCCM-IH is currently liaising with Government to agree the terms of the transaction.
ZCCM-IH shares are listed on the Lusaka Stock Exchange (LuSE) and also traded on the Paris bourse in France.
In this regard to comply with the Securities Act, cap 354 of the Laws of Zambia and the listing rules of the LuSE, further announcements will be made to inform the shareholders and the investing public as the transaction progresses.
The shareholders have since been advised to exercise caution when dealing in the company’s securities until a full announcement is made.

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