By Bennie Mundando
Mopani Copper Mines Plc has confirmed Government’s 100 percent shareholding acquisition after buying off Glencore’s 73.1 shares through the Zambia Consolidated Copper Mines-Investment Holdings (ZCCM-IH).
Before this transaction, Glencore had 73.1 percent, First Quantum Minerals (FQM) had 16.9 percent and ZCCM-IH had 10 percent.
Both shareholding stakes for Glencore and FQM have been acquired through the acquisition of a joint company called Carlisa Investments Corporation, bringing the entire ownership of the mining giant into Government hands.
Mopani Public Relations Manager Nebert Mulenga told The Scoop this morning Glencore has sold its majority stake in Mopani to ZCCM-IH following the conclusion of the shareholding discussions.
“Mopani Copper Mines Plc hereby confirms that Glencore has sold its majority stake in Mopani to ZCCM-IH following the conclusion of the shareholding discussions. ZCCM-IH has been a shareholder in Mopani for over 20years and is well placed to build on the significant investment undertaken by Glencore to help position Mopani as a Zambian copper champion.
“The shareholding transfer process is expected to be formally completed by the end of the first quarter of 2021.Glencore will continue to be in operational and financial control while the handover formalities are being undertaken by the involved parties. Further updates will be communicated as appropriate,” Mr. Mulenga said.
And today Glencore confirmed the development through the following statement:
Glencore today announces that its subsidiary Carlisa Investments Corp. (“Carlisa“), in which Glencore holds 81.2% of the shares, has signed an agreement with ZCCM Investments Holding Plc (“ZCCM“) to transfer its 90% interest in Mopani Copper Mines plc (“Mopani“) to ZCCM, the owner of the remaining 10% interest in Mopani, for US$1 and the Transaction Debt (as defined below).
Completion of the sale is conditional on receipt of certain regulatory approvals in Zambia and on the approval of the shareholders and board of directors of ZCCM, and is expected to occur within the next three months.
Mopani has been funded by borrowings from Carlisa and other members of the Glencore group. On completion, US$1.5 billion of debt (the “Transaction Debt“) will remain owed by Mopani to Glencore group creditors on the following terms:
a. interest under the Transaction Debt will be capitalised for the first three years after completion, and thereafter will be payable quarterly at LIBOR + 3% (subject to a switch to an equivalent interest rate based on SOFR); and
b. principal outstanding under the Transaction Debt will be repayable under a dual mechanism whereby:
i. 3% of gross revenue of the Mopani group from 2021-2023 (inclusive), and 10-17.5% of gross revenue of the Mopani group thereafter; and
ii. 33.3% of EBITDA less tax, changes in working capital, capital expenditure, royalty payments and interest and principal (calculated under the first mechanism) payments in respect of Transaction Debt, is at the end of each quarter required to be paid. Repayment of principal (together with accrued interest) may additionally be required in the event of an occurrence of certain other early prepayment events, including certain change of control events in respect of Mopani.
After completion of the sale, Glencore will retain offtake rights in respect of Mopani’s copper production until the Transaction Debt has been repaid in full.
As ZCCM is the holder of 10% of the voting rights in Mopani, a subsidiary undertaking of Glencore plc, the transaction falls within the criteria set out in Listing Rule 11.1.10R. Accordingly, Glencore has obtained written confirmation from a sponsor that the terms of the transaction are fair and reasonable as far as Glencore shareholders are concerned.
For further information please contact:
t: +41 41 709 2880
m: +41 79 737 5642
t: +41 41 709 24 62
m: +41 79 904 33 20
Glencore LEI: 2138002658CPO9NBH955