Sunday, June 23, 2024

IDC completes purchase of Zampalm Ltd for US$16 million

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The Industrial Development Corporation (IDC) has completed the purchase of 90 percent shares in Zambeef’s Zampalm.

The transaction was for a cash consideration of US$16 million.

“We are pleased to advise that all the conditions precedent to the Transaction were completed on 6 April 2018 and Zambeef has received the cash consideration of USD16 million,” a statement from Zambeef read.

It said Zambeef is entitled to up to a further USD 2 million in cash consideration, subject to certain performance milestones being achieved by Zampalm over the three years from 2018 to 2020.

The firm said the transaction is expected to result in the Group reporting a loss on disposal of a discontinued activity of circa USD 2.3 million.

“The Transaction is aligned with the Group’s strategy of focusing on its core business of the production and retailing of cold chain meat and dairy products, cropping and stock feed.”

It said the sale proceeds will be used to further pay down the Group’s debt and thus reduce gearing and interest costs.

Below is full Zambeef statement

Zambeef the fully integrated cold chain foods business with operations in Zambia, Nigeria and Ghana, is pleased to provide an update on the Zampalm transaction.

As was announced on 6 September 2017, Zambeef entered into a Share Sale Agreement, a Shareholders’ Agreement and a Management Agreement (together, the “Agreements”) with the
Industrial Development Corporation of Zambia Limited (“IDC”) for the sale of 90 per cent. of Zambeef’s shareholding in its wholly owned subsidiary, Zampalm Limited (“Zampalm”) to IDC for a cash consideration of USD16 million (the “Consideration”) (the “Transaction”).

We are pleased to advise that all the conditions precedent to the Transaction were completed on 6 April 2018 and Zambeef has received the cash consideration of USD16 million. Zambeef is entitled to up to a further USD2 million in cash consideration, subject to certain performance milestones being achieved by Zampalm over the three years from 2018 to 2020. The Transaction is expected to result in the Group reporting a loss on disposal of a discontinued activity of circa USD 2.3 million.

The Transaction is aligned with the Group’s strategy of focusing on its core business of the production and retailing of cold chain meat and dairy products, cropping and stock feed. The sale proceeds will be used to further pay down the Group’s debt and thus reduce gearing and interest costs.

22 COMMENTS

    • So long this is applied elsewhere govt has parastatals so that there is equity. It would be ridiculous to make an exception for Chief Kopa and his people alone. Do you see how nasty it can get?

    • This move was started by Diego Casilli who sold the Palm plantation to Zambeef, at the time Zambeef acquired Amanita (then renamed Zamanita). Now with Zambeef having sold off Zamanita, they struck a deal to pass the burden on to govt thru IDC (SoE). The $16m purchase is from public funds because IDC is a holding company for all parastatals. This transaction is highly questionable and an inquiry should be done to ascertain if the due process was followed in making the investment decision, as well as if the investment is viable and that IDC has the relevant market linkages to successfully run Zampalm.
      This is looting at its best. Can the MP’s seek clarification from Hon. Mwanakatwe to whom IDC is answerable?

    • This deal was initiated and actually approved by former Finance Minister Felix Mutati. I pray that Maggie can search her conscious and her soul because this deal is not in the interest of Zambia as a nation. Why should IDC take over a loss making project? We have Kawambwa which was repossessed by govt from some Zimbabwean entity, we have so many govt projects that have stalled due to lack of funds why should the state come to bail Zambeef? The majority shareholder in Zambeef CDC (through the UK’s DFID) should know this they too one day will be answerable to the Zambian people for being part and parcel of this day light robbery.

    • Malongo,
      Get all the data about the deal, business plan and prospects. why do you UPND chaps see corruption in everything. What are you yourself doing for your poor family?

  1. This is a corrupt transaction which will come to haunt President Lungu and his IDC. Apart from the US$16 million cash paid for Zampalm, IDC will have to spend atleast another US$25 million on operations and reinvestment. Its surprising that Zambeef a private sector company can opt out of Zampalm whilst IDC a parastatal firm can buy 90% of the company and think they will manage it better than Zambeef. President Lungu should know that recreating parastatals will only drain his cash strapped Government and will not in any way instill confidence in his Governance. Other parastatals under IDC include NCZ, Times of Zambia, Zesco, Mulungushi textiles and others which are still struggling. Anyway time will tell

  2. I think IDC has become a conduit for corruption. Carl Irwin regretted buying Zampalm from Diego Cassili as it drained Zambeef of millions of dollars without ever generating any profits. NAPSA who are invested in Zambeef refused to separately co-invest with IDC in the Zampalm project. CDC refused to invest in Zambeef unless Zampalm was disposed off. Now IDC against all advise from DFIs, experts and Palm oil investors across the world has purchased Zampalm for $16 million cash. Can IDC please tell the nation when they expect the payback of $16 million and how much they intend to invest to bring Zampalm to profitability. IDC should also tell us the source of the $16 million which they are paying as cash to Zambeef when other parastatals are left

  3. Veteran crook Lawrence Sikutwa and other minions are in the process of stealing USD16 million from taxpayers to save ZAMBEEF’ from losing millions of US dollars it poured into an ill-conceived, nonproductive project to produce palm oil. In 2009, Zambeef created Zampalm Ltd to produce palm oil and invested more than $20 million.But after realizing that producing palm oil in Zambia is a non starter or can only be done at huge costs with no profit, Zambeef has conspired with the PF regime to pass on this loss to the Zambia tax payers.

  4. Back in 2015 ZAMBEEF invested over $20million for a project they launched in 2009 fast forward 2018 they offload it for $16 million….this is too risky for taxpayers funds. This transaction needs to be investigated by the ACC as it smells of corruption. The Zambian climate is not conducive for growing palm oil so what the Zambian people have paid for through Lungu’s IDC is a liability that will be closed by 2021. But Zambeef has regained the money it wasted in this project. Lungu and other politicians have received their kickbacks. UPND should include IDC transactions among grounds for Lungu’s impeachment at it is clear that IDC is a tool for corruption

  5. Kwena ba IDC has money, paying $16 million cash wow. In this day and age a state owned company in Zambia can afford to undertake a transaction like this. I think madam mwanakatwe needs to educate us on IDC’s source of money when they are failing to resuscitate other companies under them where even workers havent been paid. Ala corruption in Zambia has reached epic proportions and rooting it out needs our own Ramaphosa to restore confidence. Corruption in Zambia has spread so wide under President Lungu that we will need a serious leader to sanitize our country. Iyo kwena ba IDC muli mumpiya…..I wonder who the CEO of IDC is to be splashing dollars like in a casino.

  6. The fact of the matter is Zambeef is shutting down loss making entities and this govt with this useless enetity called Indeco or IDC are repeating the same mistakes of the past

  7. These people have carefully crafted a front in IDC to embezzle millions of dollars from the treasury. If Zambeef an international company has opted out of this company, what makes IDC think they can revamp it? Is this the kind of investments that they were bragging about? Lungu and that wakaniwako at IDC who was recently mentioned in this scam a few weeks ago are working in tandem and would not stop until their greed is mate. Am discombobulated with this sheer and wanton greed never seen before in this country. Let us remove these misfits from positions of leadership before we are sent to our early graves.

    • @Nzelu,
      Let me get this straight:-
      On your own admission you have said you do not know whether this is a good deal or not, and yet when smart people question things, as it should be, you find it funny??

    • Thank you Nzelu, I am sick and tired of these armchair critics. They see everything in one direction. We need Pres Lungu to use the machinery for the sake of the country.

  8. The Chairman of the IDC should know that this transaction violates Article 210(1) of the amended 2016 Constitution which he himself swore to protect. President Lungu should not be surprised in future if the dealings of the IDC become matters for his impeachment. The investment transactions at the IDC also clearly border on abuse of authority in the way there conducted. US$16 million cash payment deal is prima facie for corruption make no mistake!

  9. This deal was initiated and actually approved by former Finance Minister Felix Mutati. I pray that Maggie can search her conscious and her soul because this deal is not in the interest of Zambia as a nation. Why should IDC take over a loss making project? We have Kawambwa which was repossessed by govt from some Zimbabwean entity, we have so many govt projects that have stalled due to lack of funds why should the state come to bail Zambeef? The majority shareholder in Zambeef CDC (through the UK’s DFID) should know this they too one day will be answerable to the Zambian people for being part and parcel of this day light robbery.

  10. Why should IDC waste int money or rather our money in buying a private firm when its business should be starting new industries? Who fixed the price of this entity for IDC, when IDC should never have been involved? Why is IDC enriching the shareholders of this loss making company? Why shouldn’t Zambians not hold the managers of IDC to account personally for this serious financial infringement, and disguised theft of public funds?

  11. This just brings to mind memories of the Tika Iron Ore project of the early 1970s. Late Humphrey Mulemba had insisted on investing in this project which drained the then government of much needed resources. I wonder why we don’t learn from projects that have questionable feasibility reports.

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