Update on Disposal of Sinazongwe Farm

RNS Number : 1330J

Zambeef Products PLC

08 April 2020

 

8 April 2020

Zambeef Products plc

("Zambeef" or the "Group")

Update on Disposal of Sinazongwe Farm

Further to the Company's announcement of 17 September 2019 and 13 March 2020, Zambeef (AIM: ZAM), the fully integrated cold chain food processing and retailing group with operations in Zambia, Nigeria and Ghana, announces that it has entered into a Second Side Agreement with Chenguang Biotech (Zambia) Agri-Dev Limited ("Chenguang") extending the Completion/Long-Stop date for the Sinazongwe Farm disposal (the "Transaction") from 7 April 2020 to 24 April 2020.

Zambeef has duly fulfilled the Conditions Precedent as set out in the binding sale and purchase agreement (the "SPA") and is ready to complete the Transaction. Chenguang, however, has advised the Company that it is unable to complete the Transaction on the Completion Date of 7 April 2020 due to the coronavirus pandemic resulting in a delay in converting the balance of the Purchase Price in the sum of USD9,000,000 from Chinese Yuan into US Dollars, and then transferring the same to Zambia.

The parties have therefore agreed to extend the Completion Date to 24 April 2020, in accordance with the terms in the Second Side Agreement, which also states that the balance of the Purchase Price shall now be paid by Chenguang to Zambeef as follows:

a)  USD3,000,000 to be paid on or before 10 April 2020; and

b)  USD6,000,000 to be paid on or before 24 April 2020 ("Final Instalment").

Completion of the Transaction shall be subject at all times to Zambeef receiving the Final Instalment. Zambeef shall only deliver to Chenguang the completion documents set out in the SPA after payment of the Final Instalment has been received.

The Condition Subsequent set out in the Addendum Agreement (as announced on 13 March 2020) relating to Zambeef's obligation to obtain the subdivision of approximately 20 hectares of the Remaining Extent of Farm No 4906 (Feedlot and Abattoir) has also been extended from 29 May 2020 to 19 June 2020.

All other Conditions Precedent as set out in the SPA have been satisfied by both parties.

As previously announced, the disposal of Sinazongwe Farm is a manifestation of the Group's stated strategy to focus on its core business of producing and retailing cold chain meat and dairy products and stockfeed. The net sale proceeds will largely be used to pay down the Group's debt and thus reduce gearing and interest costs.

For more information, please visit www.zambeefplc.com or contact:
Zambeef Products plc Walter Roodt, Chief Executive Officer Faith Mukutu, Chief Financial Officer	Tel:  [phone]
Strand Hanson Limited James Spinney Ritchie Balmer Rob Patrick	Tel: [phone]
Finncap Christopher Raggett	Tel: [phone]
Powerscourt Nick Dibden Bethany Johannsen	Tel: [phone]
Pangaea Securities Wendy Tembo	Tel: [phone]

Notes to the editors

The Zambeef Group is one of the largest integrated cold chain food producers in Zambia, involved in the production, processing, distribution and retailing of beef, chicken, pork, milk, eggs, dairy products, fish, flour and stock feed. The Group also has large cereal row cropping operations (principally maize, soya beans and wheat), with approximately 7,973 hectares of row crops under irrigation, which are planted twice a year and a further 8,776 hectares of rain-fed/dry-land crops available for planting each year.

Chenguang Biotech (Zambia) Agri-Dev Limited is a subsidiary of the C henguang Biotech Group Co. Limited based in China (" CCGB"). CCGB is a listed company on the Shenzhen stock exchange with 22 subsidiary companies. The Chenguang Group is one of the worlds leading producers and suppliers of natural plant extraction for paprika oleoresin, capsicum oleoresin and marigold oleoresin. The Chenguang Group also manufactures natural pigments, natural spice extracts, essential oils, natural nutrient and medicinal extracts and protein.

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement via Regulatory Information Service, this inside information is now considered to be in the public domain.

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