Message Ven 20 Jan 2017 10:57

ZCCM-IH, KCM Agree To Staggered Payment of $103m Price Deal

By Editor on January 20, 2017No Comment
ZCCM-IH, KCM Agree To Staggered Payment of $103m Price Deal Debt

CASH-STRAPPED Konkola Copper Mines has failed to pay US $103 million to ZCCM-IH as directed by the London High Court in relation to a 2013 copper-price participation deal which the Vedanta Resources-owned mine abrogated.
And sources close to the transaction have revealed that the two parties entered into a consent judgment when it became clear that KCM could not meet the court deadline.
On December 30, the London High Court directed KCM to pay, within 30 days from the date of the default judgment, money it owed ZCCM-IH in the copper-price participation deal.
Simultaneously, the ruined mining giant was ordered to pay 80 per cent of the 180, 000 British pounds ZCCM-IH spent to obtain the default judgment which entitles it to recover funds which KCM transferred to Vedanta in breach of the pricing agreement.
But in an emailed statement on Tuesday evening, ZCCM-IH stated: “ZCCM-IH and KCM have agreed to amend the dates by which KCM will make payments in respect of the judgment sum [which sum remains outstanding as ordered by the English Court]…pursuant to the terms of the consent order, KCM will pay ZCCM-IH: a) US$ 20 million on 31 January 2017; b) US$ 22 million on 28 February 2017; and c) US$ 2,550,000 at the end of every month (commencing on 31 March 2017) until such time as the Judgment sum has been paid in full.”
And the sources revealed that KCM had demonstrated its inability to pay ZCCM-IH the whole amount at once as directed by the London High Court.
“They [KCM] demonstrated to us that their current cash flows could not accommodate a lump sum payment of about US $100 million and so, we are agreed to stagger the payment period because after the expiry [of the third days], it was going to be an illegality on the part of KCM and our [ZCCM-IH] shareholders would have queried us,” a source close to ZCCM-IH said. “KCM has indicated that they are currently in negotiations with their parent company [Vedanta Resources] for capital injection of US $1 billion fresh capital this year, and we are hoping that should ease their liquidity challenges. But luckily, they settled our legal costs.”