In accordance with Section 3.4(b) of the Lusaka Securities Exchange Listings Requirements (“LuSE Listings Requirements”), the Board of Directors of Copperbelt Energy Corporation Plc (“CEC” or “the Company”) wishes to inform shareholders and the market that it is in receipt of a notice of intention to arbitrate from ZESCO Limited (“ZESCO”), pursuant to the Bulk Supply Agreement (“BSA”) and Article 3 of the UNCITRAL Arbitration Rules 1976.
The arbitration results from:
- ZESCO’s claim that CEC has failed to pay money due to them for electricity supplied under the BSA. The amounts outstanding relate to the supply of power by CEC to Konkola Copper Mines Plc (“KCM”), which supply KCM has not paid for.
- ZESCO’s disagreement with a statement in CEC’s 2018 annual report relating to the contingent liability arising from the 2014 Energy Regulation Board (“ERB”) electricity tariff increase specific to the mining companies, which the mining customers have legally contested and were granted a Court injunction pending determination of the matter by the High Court for Zambia. In its 2018 annual report, CEC stated that should the High Court rule in favour of the ERB and upon receipt of the owings from the mining customers, the Company would pay the amount due to ZESCO. ZESCO contends that the purported funds owing should be paid to them in full by CEC upon receipt of a ruling by the Court in favour of the ERB, irrespective of whether the mines would have paid CEC or not.
The arbitration may have a material effect on the price of the Company’s securities and shareholders are accordingly advised to exercise caution when dealing in the Company’s securities until further information is published.
By Order of the Board
Julia C Z Chaila
Issued in Lusaka, Zambia on 27 September 2019
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First Issued on 27 September 2019