Announcement of the Results of Batoka Mandatory Offer

1. Background
   1.1 Shareholders are referred to the Cautionary Announcements made by the Company on 24 December 2013, 04 March 2014 and 11 April 2014, in compliance with the provisions of the Third Schedule of the Securities (Takeovers and Mergers) Rules, Statutory Instrument No 170 of 1993, (the “Takeovers Rules”), issued pursuant to the Securities Act, Chapter 354 of the Laws of Zambia (the “Securities Act”), and the Harmonised Listing Rules of the Lusaka Stock Exchange (“LuSE”).

   1.2 CEC is majority owned by Zambian Energy Corporation (Ireland) Limited (“ZECI”) which holds 52% shareholding whilst the balance of 48% is held by various institutional and retail investors. ZECI is wholly owned by Zambian Energy Corporation Limited (“ZECL”), a Zambian private limited company.

   1.3 ZECL and its shareholders have undertaken an internal reorganization involving changes in its ownership but no changes in the level of ZECI’s 52% ownership of CEC shares.

   1.4 As part of the internal reorganisation of ZECL, Batoka Energy Holdings (Ireland) Limited (“Batoka Ireland”) acquired 40% of ZECL, which was held by the minority shareholders of ZECL (the “ZECL Minority Shareholders”).

   1.5 The Securities and Exchange Commission of Zambia (“SEC”) formally advised the Company that the internal reorganisation of ZECL stated under section 1.4 above, resulted in an obligation on Batoka Ireland to make a mandatory offer to CEC shareholders under the Takeovers Rules.

   1.6 Therefore, as directed by the SEC, Batoka Ireland undertook a mandatory offer to the minority shareholders of CEC to acquire the shares in CEC not owned by ZECI, pursuant to Rule 56 of the Takeovers Rules.

   1.7 The mandatory offer by Batoka Ireland to the minority shareholders of CEC opened on 05 May 2014 and closed on 30 May 2014.

2. Results of the Mandatory Offer
   
   On 25 March 2014, Batoka Ireland submitted a cash offer to the Board of directors of CEC to purchase up to 780,000,597 shares of CEC from the minority shareholders of CEC, representing 48% shareholding in the Company (the “Offer”), at a price per share ex dividend of K0.6746 (the “Offer price”) to be settled at the close of the Offer period.

   At the close of the Offer, a total of 5,687,616 shares were tendered for sale to Batoka Ireland via the Form of Acceptance. This level of acceptance represents 0.73% of the 780,000,597 target shares that were the subject of the mandatory offer or 0.35% of the total shareholding in the Company.

   As summarised in the table below, there were a total of 42 individual acceptances made up of 41 retail and 1 institutional out of a shareholder base of about 4,000 investors.

   Shareholder	No of participants	Volume sold	% of sales	% of total target shares
   Retail	41	1,129,491	19.86	0.15
   Institutional	1	4,558,125	80.14	0.58
   Total	42	5,687,616	100.0	0.73

   During the Offer period some of the shares tendered for sale were sold by the brokers directly on the LuSE secondary market at a price higher than the mandatory offer price of K0.6746 in response to demand for CEC shares from other investors. The balance of the shares were acquired by Batoka Ireland and subsequently sold back into the market on a back to back basis as declared in the Offering document.

   The net result is that after the conclusion of the mandatory offer process, the shareholding in CEC has not changed at all. Zambian Energy Corporation (Ireland) Limited (“ZECI”) still holds 52% shareholding whilst the balance of 48% is still held by various institutional and retail investors. For its part, Batoka Ireland still holds the 40% shareholding that it acquired in ZECL after the restructuring of ZECL.

   Accordingly, the mandatory offer has not reduced the free float of CEC which still exceeds 25% and is fully compliant with the requirements of the LuSE Listing Rules.

3. Conclusion
   It will be noted that the vast majority of CEC shareholders were not moved by the mandatory offer and opted to hold on to their CEC shares. The CEC Board and management wish to acknowledge this overwhelming vote of support from the shareholders, which demonstrates their confidence in the growth plans and strategy of CEC going forward.

16 June 2014
Lusaka – Zambia