The Zambia Privatisation Agency (ZPA) is pleased to announce that the Minister of Finance and Economic Development, Honourable R.D.S. Penza has signed the Sale and Purchase Agreement with Dyno Industrier ASA of Norway for 70 per cent of the shares owned by the Government of the Republic of Zambia (GRZ) through Zambia Consolidated Copper Mines (ZCCM) for a price consideration of US$1,260,000.
Dyno Industrier ASA is a Norwegian industrial chemicals group with operations in over 30 countries around the world. Over the years Dyno Industrier ASA has grown into a well diversified company, with core business areas in the fields of explosives, speciality chemicals and plastic products - with world-wide markets. Due to continuous research and development, Dyno Industrier ASA is a technical leader in the field of factory manufactured explosives, bulk explosives, initiation systems and technical grade ammonium nitrate.
The acquisition of Zamdet by Dyno Industrier ASA is a further step in its strategy of expanding its presence on the African continent.
ZAMDET is a joint venture between ZCCM and Nitro Nobel AB, a company 100% owned by Dyno Industrier ASA. The two companies entered into a Joint Venture Agreement on 6 November 1990 to finance, construct, equip, commission and operate the plant at Chambeshi that would be able to produce up to 7,000,000 units of Non Electric detonators (Nonel) for sale to the local mining industry, especially ZCCM.
ZCCM acquired a 70 per cent share holding and Nitro Nobel AB a subsidiary of Dyno Industrier ASA, 30 per cent. Nonel detonators are used for initiation of explosives in a safe and controlled manner. The technology used in the manufacture of Nonel detonators is proprietary to Nitro Nobel AB.
The Company has since inception been profit making. The Company's market base within Zambia has expanded to include customers other than ZCCM. Exports to Zimbabwe and Zaire commenced in 1995 while other export opportunities are being explored.
Zambia Detonators' main premises are situated on a property that was formerly used by Chambeshi Mine of ZCCM. Nitro Nobel AB, the minority shareholder had pre - emptive rights as enshrined in the Company's Articles of Association.
In terms of the same Articles of Association, the ZAMDET Board requested the Company's Auditors Messrs Deloitte & Touche to perform a valuation on an earnings basis of ZAMDET's shares which was used as the basis for establishing the offer price. The purchase consideration agreed to is in line with the value of ZAMDET recommended by Deloitte and Touche, the company's Auditors.
To ensure transparency in this divestiture, the Negotiations were conducted by an independent Negotiation Team appointed by the ZPA Board, comprising Mr Sangayakula Sanga as Chairman, and Mr. B.S.K. Chiti 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.
In addition to the purchase consideration, the Agreement included specific clauses : investment which will enable the introduction of world class operating processes into the Company and; no redundancies of the existing staff.
Furthermore, the minority shareholders supported the desire of the Government to see the development of a vibrant stock exchange in Zambia, and recognised the need for the general public in Zambia to be given the opportunity to purchase shares in ZAMDET. Hence, the Purchasers have made an undertaking to float some shares in due course on the stock exchange.
The ZPA is pleased with the increasing level of confidence being shown by local and international investors in the future of Zambia and hope this will go a long way in reviving the Zambian economy.
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