The Board of Directors of Zambeef (the “Board”) is pleased to announce that it has completed the settlement of the put options granted to Rainbow Farms Investments Proprietary Limited (“RCL Foods”) in 2013 as part of the Zam Chick Limited (“Zam Chick”) and Zamhatch Limited (“Zamhatch”) joint ventures entered into with RCL Foods (the “Put Options”).
As announced on 24 March 2016, Zambeef advised shareholders that RCL Foods had exercised the Put Options on 23 March 2016, requiring Zambeef to acquire its shares in these companies, either by means of the issue of new ordinary shares in Zambeef (“Zambeef Shares”) and/or through the payment of cash.
As settlement of the Put Options by means of issuing Zambeef Shares would, in the opinion of the Board, have resulted in an unacceptable dilution of existing shareholders, the Board resolved to settle the Put Options wholly in cash through part of the proceeds from the US$65 million investment from CDC Group PLC (“CDC”), as announced on 4 August 2016.
As also announced on 4 August 2016 (and detailed further in the circular sent to shareholders dated 18 August 2016):
- Zambeef, Zam Chick and RCL Foods agreed that the RCL shares market value for the Zam Chick Put Options is USD14,250,000;
- Zambeef, Zamhatch and RCL Foods entered into an Interim Settlement Agreement dated 27 July 2016, that Zambeef will pay RCL Foods an amount of USD9,135,604 as an Interim Settlement Amount, for the purposes of completing the Zamhatch Put Option.
As such, Zambeef has transferred today a total of USD23,385,604 in cash to RCL Foods.
As far as the Zamhatch Put Options disputed amount is concerned, Zambeef believes that it is due USD962,000 while the amount RCL Foods believes is due to them is USD1,023,570. The Interim Settlement Agreement allows either party to pursue the disputed difference within 6 months of the Settlement Date. A further announcement will be made when this matter has been resolved.
Zambeef Chairman, Dr Jacob Mwanza, commented: “Following CDC becoming a long-term and supportive shareholder in Zambeef through their investment in the Group, the settlement of the Put Options is the first step in the execution of our plan. We have enjoyed a good working relationship with RCL Foods and expect to resolve the disputed amount in an amicable manner.”
“We continue to focus on accelerating the roll out of our new Zambeef macro outlet stores, which is the key strategic priority of the Group.”
For more information please visit www.zambeefplc.com