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International Resources Holding RSC Limited (“IRH”), has committed to invest a total of US$1.1 billion into Mopani Copper Mines (MCM), authorities have said.
ZCCM-IH Company Secretary, Charles Mjumphi, said consequently, upon the satisfaction of those condition precedent, the relationship between Glencore International AG and MCM would be restructured.
Mjumphi made the announcement in a statement issued in Lusaka on Friday.
He stated that ZCCM-IH, in consultation with its transactions advisors, was preparing a transaction circular providing all the relevant information in respect of the transaction, including financial and technical information.
“Shareholders will be able to vote on the Transaction at an Extraordinary General Meeting (“EGM”) due to take place in the first quarter of 2024,” Mjumphi said.
Breaking down the investment, Mjumphi said US$620 million would be provided in the form of new equity capital in return for a 51 percent stake in MCM.
The ZCCM-IH Company Secretary stated that this would be used for MCM’s capital projects, and to stabilise the working capital position of the business.
“Approximately US$400 million will be provided as a Shareholder Loan to MCM by way of novation of the Glencore debt,” he said.
Mjumphi indicated that this would be used as part of the consideration to settle the original Glencore transaction debt of US$1.5 billion plus interest and the Glencore Super Senior procured letters of credit.
He stated that further capital may be made available to MCM as shareholder loans, if required, based on the future working capital requirements of the business.
“ZCCM-IH will retain a 49 percent equity stake in MCM at Closing, the executive management of MCM will be retained and will be supplemented by industry experts from IRH with the relevant skills and expertise to complete MCM’s capital projects and turnaround its operational performance,” Mjumphi said.
He stated that a new Board of Directors, reflective of the revised shareholding structure, would be constituted and IRH would, subject to certain conditions precedent being met, provide up to $220 million in interim funding.
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Mjumphi stressed that the funding would be available to MCM prior to the closing, to ensure that the business had sufficient liquidity until closing.
He stated that the interim funding would form part of the US$620 million new equity investment.
“The total consideration is US$1.1 billion which will be split between equity and debt in the following proportion: US$620 million in new equity, and $300 million as a shareholder loan by way of novation of part of the Glencore Transaction Debt,” he highlighted.
Mjumphi said up to US$100 million would go to the settlement of the Glencore procured letters of credit and up to US$80 million in shareholder loans.
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