Announcement of the terms of the Mandatory Offer to the minority shareholders of Copperbelt Energy Corporation PLC (“CEC”).

  1. Background

    1.1 We refer to the Cautionary Announcements made by Copperbelt Energy Corporation Plc (“CEC” or the “Company”) on 24 December 2013 and 04 March 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”) has formally advised that the internal reorganisation of ZECL stated under section 1.4 above, results in an obligation on Batoka Ireland to make a mandatory offer to CEC shareholders under the Takeovers Rules.

    1.6 Therefore, Batoka Ireland hereby announces that it is making 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, and has formally sent a letter of offer accordingly to the Board of CEC.

2. Terms of the 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. The Offer price of K0.6746 per share is the price at which Batoka Ireland acquired its indirect interest in CEC from the ZECL Minority Shareholders.

Accordingly as stated under section 4 below, Batoka Ireland will send each shareholder of CEC an Offer document setting out details of the Offer. Simultaneously the Board of CEC will also send each shareholder of CEC a Circular document setting out its analysis of the Offer and the CEC Board’s recommendation as to whether or not to accept the Offer.

At their sole discretion, shareholders of CEC registered as members of the Company as at the Record Date of the Offer may choose to sell to Batoka Ireland, some, all or none of the shares they own in CEC.

3. Identity of Ultimate Offeror or controlling shareholder
ZECI is the direct shareholder of CEC. ZECI is in turn owned by ZECL. ZECL is now jointly owned 100% by Batoka Energy Holdings Limited, a Zambian private limited company (“Batoka Zambia”) and Batoka Ireland ( together the “Batoka Group”).

4. Offer Document and Circular
4.1 An Offer Document from Batoka Ireland and a Circular from the Board of CEC will be posted to all remaining shareholders of CEC, as set out in the timetable below.

4.2 The Offer Document from Batoka Ireland will be posted no later than Friday, 02 May 2014 and will include:
i) a description of the Offer;
ii) a detailed timetable of the Offer; and
iii) actions that should be taken by minority shareholders who wish to participate in the Offer by selling some or all of the eligible shares they own in the Company.

4.3 The Circular from the Board of the Company will be posted no later than Friday, 02 May 2014 and will include:
i) the written advice, including reasons, of an independent financial advisor contracted by the Board of the Company as to whether the Offer is, or is not, fair and reasonable;
ii) the recommendation of the Board of the Company in relation to acceptance or rejection of the Offer; and
iii) information to enable the minority shareholders to reach a properly informed decision as to whether to accept or reject the Offer.

5. Conditions of the Offer
5.1 The full terms of the Offer will be contained in the Offer Document that will be sent to each minority shareholder. The Offer is being made subject to the provisions of the Takeovers Rules and the Companies Act Chapter 388 of the laws of Zambia and the Listing Rules.

6. Confirmation that resources are available to satisfy full acceptance of the offer
Stockbrokers Zambia Limited, who are the sponsoring broker confirm that adequate resources are available to satisfy full acceptance of the Offer to acquire the minority shares in the Company under the Offer.

7. Offer Timetable
7.1 The Offer period shall remain open for twenty-one (21) days after the posting of the Offer Document and the Circular to the eligible minority shareholders.
7.2 Shareholders wishing to sell some or all of their shares in the Company must tender their shares as prescribed in the Offer Document, before the close of the offer period which runs from Monday, 05 May 2014 to Friday, 30 May 2014.

7.3 The indicative timetable is summarised below:

Friday, 11 April 2014
Batoka Ireland issues press announcement of terms and conditions of the Mandatory Offer to CEC shareholders.

Wednesday, 30 April 2014
Record Date : share register record to be used for the mandatory offer.

Friday, 02 May 2014
The Offer Document (from Batoka Ireland) and the Circular Document (from CEC Board) are both posted to CEC shareholders via registered mail.

Monday, 05 May 2014
Offer opens at 08:00 hours.

Friday, 30 May 2014
Offer closes at 17:00 hours.

Wednesday, 04 June 2014
Last date for receipt of postal acceptances, postmarked on or before Friday 30 May 2014 to be received by 17:00 hours.

Friday, 06 June 2014
Date on which share transfers will be traded through the LuSE (T+0).

Wednesday, 11 June 2014
Settlement Date (T+3).

Thursday, 12 June 2014
Cheques available for collection from brokers.

Monday, 16 June 2014
Results of the Offer published.

Friday, 27 June 2014
Uncollected cheques posted to minority shareholders.

8. ACTION BY SHAREHOLDERS – AND IMPORTANT NOTICE
The minority shareholders of the Company are not obligated to sell their shares to Batoka Ireland in the mandatory offer. The mandatory offer gives the minority shareholders the opportunity, following the change in control of the Company, to decide whether to keep all their shares or sell some and keep part or sell all.

Shareholders who wish to respond to the Offer by selling some or all of the shares they own in the Company should complete the Acceptance Form enclosed with the Offer Document.

Shareholders who prefer not to sell any of their shares do not need to respond to the Offer Document in any way and will simply retain their existing shares in the Company.

11 April 2014
Lusaka – Zambia


STOCKBROKERS ZAMBIA LIMITED
[MEMBER OF THE LuSE and REGULATED BY THE SECURITIES AND EXCHANGE COMMISSION OF ZAMBIA]