The Zambia Privatisation Agency is pleased to announce that the Minister of Finance Honourable R D S Penza has signed the sale agreement with African Plantations Corporation LDC for the sale of 100% shares in Zambia Coffee Company Limited.
The Zambia Coffee Company Limited, situated in the northern part of Kasama in the Northern Province, covers a total land area of 3,064 hectares of which 910 are cleared including 318 planted with coffee. The Zambia Coffee Company Limited has been owned by the Zambia Industrial and Mining Corporation Limited (ZIMCO) (in liquidation).
The Zambia Coffee Company Limited was established in 1985 and has a modern processing factory which was commissioned in 1986.
The Zambia Coffee Company Limited was extensively advertised for sale locally and internationally on two occasions but little investor interest was generated mainly due to the poor performance of the Company over the years.
As at 30 September 1995 the Company was practically insolvent with a negative working capital of approximately K77.177 million with the Company failing to pay its creditors and employee salaries.
The acquisition of Zambia Coffee Company Limited by African Plantations Corporation LDC comes at a critical time for the coffee industry which has been experiencing declining growth.
African Plantations Corporation LDC is a private company registered in Bermuda which operates and manages coffee plantations in Central and East Africa.
African Plantations Corporation LDC owns the following plantations in Africa:
| four former co-operative farms near Kilimanjaro area | |
| Hanura, Xeno, Helena Estates in Tanzania | |
| and a 2,500 hectares development in the Southern region of Ethiopia |
African Plantations Corporation LDC has purchased 100% of the shares in Zambia Coffee Company Limited for a total consideration of US$6,720,994. This consideration comprises:
| US$ | |
|---|---|
| Cash payment for the shares | 115,694 |
| Development & Expansion | 6,075,000 |
| Total liabilities taken over | 330,300 |
| Employee Training | 200,000 |
| Total investment package | 6,720,994 |
The cash proceeds from the sale of shares will flow in two stages as follows: 10% on signing the sale agreement and the balance on completion, which should be the next two months.
The basis of the privatisation has been to attempt to secure a future for the Zambia Coffee Company Limited in particular and the coffee industry in general by attracting players with both the financial resources and technical know-how to run coffee plantations.
State ownership as demonstrated above has been a failure and it is hoped that this privatisation with a legally binding investment clause of US$6,720,994 will assure the Company of future survival.
The transaction was negotiated by an independent team composed of Mr Andrew Hamaamba (formerly Permanent Secretary for Ministry of Agriculture, Food & Fisheries) as the Team Chairman and Mrs Harriet T Sikasote as the Team Lawyer, both individuals of high integrity appointed by the ZPA Board.
The negotiators extensively used the valuation prepared by Corporate Design, a consulting company owned by Mr Trevor Evans and Mr Charles Jenkins, and achieved an optimum price subject to the valuation.
African Plantations Corporation LDC has undertaken that there will be no redundancies as a direct result of this privatization and that they will implement a manpower policy that will ensure that employee development programmes are put in place as stated in the business plan.
African Plantations Corporation LDC has pledged continued commitment to Zambia's economic development efforts and is looking for more opportunities to participate in Zambia's model privatization programme.
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