The Zambia Privatisation Agency (ZPA) is pleased to announce that the Minister of Finance and Economic Development, has signed the Sale and Purchase Agreement with Beekay Engineering and Casting Limited of India for 98.47 per cent of the shares owned by the Government of the Republic of Zambia (GRZ) through ZCCM (96.62%) and ZIMCO(1.85%) (in Liquidation) for a purchase consideration of US$2,000,000.

The Sale and Purchase Agreement was signed on February 14, 1998 and completion took place on March 20, 1998.

Beekay Engineering and Casting Limited (BECL), a member of the 50 year old Beekay Group, is a listed company on the Indian Stock Exchange. It is a premier organisation accredited with ISO 9002 certification and specialises in the manufacture of steel & alloy steel castings for both Indian and export markets in Europe and the United States.

Beekay has carved out its niche in the global market and is also a leading supplier of spares and castings to the Zambian copper mines.

Scaw Limited, located in Kitwe, the heart of the Zambian Copperbelt is a subsidiary of the Zambia Consolidated Copper Mines and is one of the largest foundries in Central Africa with more than 30 years experience in the manufacture of castings ranging from a few kilograms to about 5 tonnes.

The product lines for the Company are mill balls and steel and castings which are primarily used for crushing and as equipment spares in the mining industry.

The Manufacturing facilities available at Scaw Limited are Electric Arc and Induction Melting furnaces, Heat Treatment including Quenching facilities, Shot Blasting machines supported by a well equipped Fabrication and Machine shop. Presently, Scaw's total mill ball production and ninety percent casting production is consumed by ZCCM.

Post acquisition, Beekay proposes to enhance the production of mill balls to respond to increased demands with the expected up swing in copper production. In addition, the casting production will also be increased to meet the demands of neighbouring export markets and other industries like Railways, Cement etc.

Deloitte & Touche (D&T), the Auditors of the Company were appointed to perform the valuation of the Company on an earnings basis approach and the valuation was used as the basis for establishing the offer price. The purchase consideration agreed to with Beekay Engineering and Casting is in line with the value of Scaw Limited recommended by Deloitte and Touche.

As per Agreement, in addition to the purchase consideration, Beekay will inject in Scaw Limited US $8 million to be utilised towards working capital, modernisation and capital expenditure, within a period of five (5) years. The Agreement includes specific clauses for investment to enable the introduction of world class operating processes at Scaw Limited.

To ensure transparency in this divestiture, the negotiations were conducted by an independent Negotiation Team appointed by the ZPA Board, comprising Dr Silane Mwenechanya as Chairman, and Mr Isaac Chali, of Chali Chama and Company as Team Lawyer, supported by ZPA Technical Staff.

As an additional measure of transparency procedures, the Sale and Purchase Agreement was reviewed by the Attorney General in his capacity as Chief Legal Advisor to the GRZ.

There were four other bidders for Scaw Limited. These were, the Management Buy Out Team, G N&Z Consortium (comprising the Zambia Venture Capital Fund, Neway Procurement of South Africa and W S Crasters of Zimbabwe), Manufacturers Distributors of Ndola and Ozz Limited of South Africa. The Management Buy Out Team later joined the GN&Z Consortium.

The ZPA is pleased with the increasing level of confidence being shown by Indian Companies in the Zambian economy and hope this will go a long way in helping resuscitate the Zambian economy.

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