CEC | Circular on Group Restructuring via Dividend in Specie of CEC Africa
Introduction
Shareholders are referred to the announcement released on Friday, 11 November 2016 regarding the Proposed Demerger of CEC Africa from the CEC Group via a dividend in specie from CEC Plc to CEC Plc Shareholders. Following the Proposed Demerger, shareholders will hold one ordinary share in CEC Plc and one ordinary share in CEC Africa. CEC Africa will not immediately be listed on the LuSE or other securities exchange, but the shares will be quoted on the LuSE with a view to pursue a listing in the future.
Following the Proposed Demerger, CEC Plc’s business will focus on its positive growth trajectory achieved through focused investments and growth opportunities, with a concentration on Zambia and Southern Africa. The strategy for the business will be centred on growth that is integrated in the core business. On a regional basis and as a regional/international power trader, the business will look to nurturing the opportunity to grow its participation in power trading and play a role in unlocking regional transmission infrastructure to facilitate power transmission and supplies in a rational approach; taking into account the appropriate risk allocation. The current power shortages in-country and in the region have triggered initiatives for the Company to play a significant role in the power sector across the value chain, all aimed at providing reliable quality services to customers. The strategic focus is around having a rational and robust methodology of allocating capital to new projects with the aim of creating shareholder value.
Following the Proposed Demerger, the concentration for the CEC Africa business will be the stabilizing of the operating assets, which will be achieved through continued operational improvements, and engaging in and contributing to the Nigerian power sector on regulatory and general industry issues. The business will also ensure that it has an optimal financing structure, with the right gearing and tenor, matching the operating cash flows. This should be achieved by ensuring that appropriate loan tenors are achieved, which should overall result in an increase in weighted average loan life.
The purpose of this Circular is to provide CEC Plc Shareholders with the pertinent information regarding the Proposed Demerger and to convene a general meeting of CEC Plc Shareholders in terms of the notice of general meeting forming part of this Circular, at which meeting the resolutions required to approve and implement the Proposed Demerger will be considered, and if deemed fit, approved in compliance with the Listings Requirements.
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