Zambeef Products PLC Investment Agreement with CDC Group plc (2284G)

TIDMZAM

RNS Number : 2284G

Zambeef Products PLC

04 August 2016

ZAMBEEF PRODUCTS PLC

("Zambeef" or the "Company")

INCORPORATED IN THE REPUBLIC OF ZAMBIA

COMPANY REGISTRATION NUMBER: 31824

LuSE SHARE CODE: ZAMBEEF

ISIN: ZM0000000201

Investment Agreement with CDC Group plc, Refinancing of some of the Existing Debt and Settlement of the RCL Foods Put Options

US$65 million fundraising through the issue of new Ordinary Shares and new Convertible Redeemable Preference Shares to CDC Group plc, utilised to settle the USD 23,385,604 of the RCL Foods Put Options and refinance USD 38,200,000 of the outstanding debt

Highlights of the Proposed Transaction:

-- Issuance of 52,601,435 new Ordinary Shares at a subscription price of USD 0.18 (approximately ZMW1.85 as at 29 July 2016 using the Bloomberg spot rates) per Ordinary Share and 100,057,658 new Convertible Redeemable Preference Shares, which are convertible into new Ordinary Shares, subject to certain exceptions, at a price of USD 0.555 (approximately ZMW5.69 as at 29 July 2016 using the Bloomberg spot rates) per Convertible Redeemable Preference Share to CDC Group plc, will be raised, in aggregate, US$65 million.

-- CDC is the UK's development finance institution. It invests in promising businesses in Africa and South Asia with aim of supporting economic development to create jobs.

-- In CDC, Zambeef has gained a constructive and supportive strategic shareholder, which will have a shareholding of approximately 17.5 per cent in Zambeef's Ordinary Shares as enlarged by the issue of the new Ordinary Shares to CDC, and voting rights over approximately 34.85 per cent. of the Company's share capital as enlarged by the issue of both the new Ordinary Shares and the Convertible Redeemable Preference Shares to CDC. Please refer to Clause 6.2 of this Announcement.

   --     Proceeds of the fundraising will be used as follows: 

o to finance in cash the Company's obligation to acquire RCL Foods' shares in, and all claims whether on loan account or otherwise against Zamhatch pursuant to the Zamhatch Put Option up to an amount up to USD 9.1 million;

o to finance in cash the Company's obligation to acquire RCL Foods' shares in, and all claims whether on loan account or otherwise against Zam Chick pursuant to the Zam Chick Option up to an amount up to USD 14.3 million;

o to refinance USD 38.2 million of the outstanding debt of the Group; and

o to finance all costs and expenses, of approximately USD 3.4 million, incurred by the Company and CDC in connection with the Proposed Transaction.

-- In addition, following completion of the Proposed Transaction, Zambeef will free up its internally generated cash flow in order to provide general working capital and to accelerate the roll out of the Company's new Zambeef macro outlet stores, which were a key strategic priority of the Group during the last year.

The Company will shortly post a circular to Shareholders (the "Circular"), including a Notice of Extraordinary General Meeting, to convene the necessary extraordinary general meeting to approve resolutions relating to, inter alia, the Proposed Transaction. Once published, a copy of the Circular and Notice of Extraordinary General Meeting will be available to view on the Company's website: http://www.zambeefplc.com/

Completion of the Proposed Transaction is conditional on certain conditions precedent having been fulfilled (see paragraph 6.8 for further details).

Dr. Jacob Mwanza, Chairman of Zambeef Products plc commented:

"I am delighted that CDC is becoming a supportive long-term shareholder in Zambeef plc. We have a longstanding relationship with them and they have a long history of making successful investments in our Country, including plenty within the agricultural and food sectors.

Through the issue of these new shares we are able to finance the purchase of RCL Foods' outstanding equity stakes in both Zamhatch and Zam Chick, refinance a significant amount of our debt, as well as provide additional working capital to accelerate the roll out of our new macro outlet stores.

This is a significant step forward for our Company and we are now in a stronger position than ever going forward. On behalf of the Board, I'd like to take this opportunity to thank CDC and all of our supportive shareholders and we look forward to delivering healthy shareholder returns over the years ahead. As per our interim announcement of 8 June 2016, the Board is pleased to report that the significant operational improvement and robust performance achieved in the first half has continued and we remain confident that we will meet market expectations for the full year and we look forward to updating the market on our progress over the coming months."

The definitions that apply throughout this announcement can be found at the end of this announcement.

This announcement contains inside information.

 
 For further information, please contact: 
 Zambeef Products plc               Tel: [phone] 
                                     369003 
 Carl Irwin, Joint Chief Executive Officer 
 Francis Grogan, Joint Chief Executive Officer 
 Strand Hanson Limited (Financial   Tel: [phone] 
  & Nominated Adviser)               3494 
 James Spinney 
 Ritchie Balmer 
 
   Finncap (Broker)                   Tel: [phone] 
                                      0500 
 Joanna Scott 
 Raymond Greaves 
 
   Powerscourt (Financial PR)         Tel: [phone] 
                                      1446 
 Nick Dibden 
 Sophie Moate 
 Nick Brown 
 

BACKGROUND TO THE PROPOSED TRANSACTION

The Company today announces that it has conditionally raised US$65 million from CDC through the issuance of 52,601,435 new Ordinary Shares to CDC at a subscription price of USD 0.18 per Ordinary Share and the issuance of 100,057,658 new Convertible Redeemable Preference Shares to CDC, (which are convertible into new Ordinary Shares subject to certain agreed terms), at a price of USD 0.555 per Convertible Redeemable Preference Share. Completion of the Proposed Transaction is conditional on certain conditions precedent having been fulfilled (see paragraph 6.8 for further details).

The proceeds of the fundraising will be used as follows:

o to finance in cash the Company's obligation to acquire RCL Foods' shares in, and all claims whether on loan account or otherwise against Zamhatch pursuant to the Zamhatch Put Option up to an amount up to USD 9,135,604;

o to finance in cash the Company's obligation to acquire RCL Foods' shares in, and all claims whether on loan account or otherwise against Zam Chick pursuant to the Zam Chick Option up to an amount up to USD 14,250,000;

o to refinance USD 38,200,000 of the outstanding debt of the Group; and

o to finance all costs and expenses incurred by the Company and CDC in connection with the Proposed Transaction.

In addition, following completion of the Proposed Transaction, Zambeef will free up its internally generated cash flow in order to finance provide general working capital and to accelerate the roll out of the Company's new Zambeef macro outlet stores, which were a key strategic priority of the Group during the last year.

The Company will shortly post a circular to Shareholders (the "Circular"), including a Notice of Extraordinary General Meeting, to convene the necessary extraordinary general meeting to approve resolutions relating to, inter alia, the Proposed Transaction. The Circular is subject to SEC approval. Once approved and published, a copy of the Circular and Notice of Extraordinary General Meeting will be available to view on the Company's website: http://www.zambeefplc.com/

The key terms of the Investment Agreement have been summarised in this announcement.

   1.    INTRODUCTION 

Zambeef Products Plc is a public limited company, and in conformity with Part V of the Securities Act Chapter 354 of the Laws of Zambia, its shares are registered with the Securities and Exchange Commission.

The Proposed Transaction is classified as a Category 1 Transaction under Section 9 and is in accordance with Section 5.51 of the LuSE Listing Rules and, accordingly, approval of Shareholders is required to be sought.

The purpose of this announcement, along with the Circular, is to inform Shareholders of the Proposed Transaction as stipulated under Section 9.20 (Transactions - Category 1 Listing Requirements) in the Harmonised Listings Requirements of the Lusaka Securities Exchange. The categorisation of the Proposed Transaction is determined by assessing its relative size to that of the market capitalisation of the Company. A percentage ratio of above 25 per cent implies that the Proposed Transaction falls under the Category 1 Listing Requirements.

   2.   ZAMBEEF GROUP OVERVIEW 

The Zambeef Group is one of the largest integrated agri-businesses in Zambia. The Group is principally involved in the production, processing, distribution and retailing of beef, chicken, pork, milk, dairy products, eggs, stock feed and flour.

The Group also has large row cropping operations (principally maize, soya beans and wheat), with approximately 8,120 Ha of row crops under irrigation and a further 8,480 Ha of rain-fed/dry-land crops available for planting each year. Double cropping of irrigated lands means Zambeef can plant 24,720 Ha per annum.

The Group also has operations in West Africa (Nigeria and Ghana), as well as developing a palm project in Zambia.

Zambeef is dual listed on the LuSE and AIM. Zambeef's subsidiary companies currently include the following:

a) Zambeef Retailing Limited (100 per cent. subsidiary) - owns and operates the manufacturing and retail operations of the Group;

b) Master Pork Limited (100 per cent. subsidiary) - owns and operates a piggery, pork abattoir, and meat processing operations of the Group;

c) Zampalm Limited (100 per cent. subsidiary) - owns a palm plantation that is being developed in Northern Zambia;

d) Zamleather Limited (100 per cent. subsidiary) - owns and operates a tannery, shoe plant, and finished leather operations of the Group;

e) Zam Chick (51 per cent. Subsidiary, RCL Foods holds 49 per cent currently) - owns and operates the chicken broiler operations, chicken abattoir and chicken processing plant;

f) Master Meats and Agro Production Company of Nigeria Limited (80 per cent. subsidiary) - Zambeef's subsidiary company in Nigeria;

g) Master Meats Ghana Ltd (90 per cent. subsidiary) - Zambeef's subsidiary company in Ghana; and;

h) The Company also holds 49 per cent. of the issued share capital in Zamhatch (RCL Foods holds 51 per cent. currently), a company that is in the business of owning and operating a breeder farm and hatchery. In addition it will complete the construction of a new stockfeed plant during the year.

   3.   DETAILS ON CDC GROUP PLC 

CDC Group plc is the UK's development finance institution. Wholly owned by the UK Government, it invests in sub-Saharan Africa and South Asia with the aim of supporting economic development in order to create jobs. CDC Group plc has invested in Africa since the institution's establishment in 1948.

CDC's net asset value is USD 5.0bn (as at 31 December 2015) and includes 1,293 investee businesses. CDC estimates that last year these companies helped create more than 1,000,000 new jobs directly and indirectly and paid USD 2.6bn in local taxes.

CDC invests directly into businesses through providing equity, debt, mezzanine finance and guarantees to businesses; and also indirectly through supporting fund managers who are aligned with CDC's aims and who invest capital on CDC's behalf. When CDC sells its stakes in businesses or redeems loans, the returns are reinvested in other businesses.

CDC aims to invest where its job creation focus can have greatest impact: in countries where jobs are scarce, and in sectors where growth leads to jobs - directly and indirectly - such as manufacturing, agribusiness, infrastructure, nancial institutions, construction, health and education.

Central to CDC's investment strategy is a rm commitment to responsible investment. The businesses that receive CDC's capital must adhere to its Code of Responsible Investing, which stipulates environmental, social and governance standards that are often above those required by local law. Investment companies that do not meet these standards at the outset must adopt a post-completion action plan to achieve them over time.

For the latest copy of CDC's annual report and to find out more about CDC, please see http://www.cdcgroup.com/Documents/Annual%20Reviews/CDC%20Annual%20Review%202015.pdf

Below is a summary of selected CDC indirect and direct investments in Zambia:

   --     AB Bank Zambia 
   --     Foresythe Farm (Silverslands Ranching Limited) 
   --     his Zambia 
   --     Kakushi Farms 
   --     Scaw Holdings 
   --     Serenje District Farms 
   --     York Commercial Park 
   4.   DETAILS OF AND RATIONALE FOR THE PROPOSED TRANSACTION 

The 2015 Financial year was a watershed year for the Company. The refocus of its operating strategy onto the distribution, via Zambeef's logistics infrastructure, of cold chain food products through its 158 retail outlets led to strong growth in revenue and EBITDA. This growth continued in the six months to 31 March 2016, resulting in a reported EBITDA of USD15.4million (ZMW175.4 million), and a record interim profit before tax of USD9.7m (ZMW110.5 million).

During the 2015 financial year, the Company, as part of its strategy to finance a reduction in gearing through the disposal of non-core assets, disposed of Zamanita Limited to Cargill Zambia Limited for a net cash consideration of USD25.7 million. This cash was used to reduce the Company's US Dollar debt, and by exiting this oil-crushing enterprise, the Company also no longer has to maintain a US Dollar borrowing facility which was previously necessary to fund the soya bean inventory required to feed the oil crushing plant. The Company has retained the ability to continue to supply its customers with cooking oil, by entering into a distribution agreement with Cargill, whereby the Company sells Cargill's cooking oil through its retail outlets, and earns a commission on all sales.

The Board is committed to explore further opportunities to reduce gearing and exposure to currency fluctuations, which have distorted financial performance of the Company over recent years and masked its operational achievements.

Shareholders will be aware of the Company's joint ventures with RCL Foods, entered into in 2013. In accordance with the terms of these transactions, RCL Foods was granted Put Options over their investments in the two companies, enabling RCL to require Zambeef to acquire its respective shareholdings in the companies.

The Company, in an announcement (Cautionary Announcement in Zambia) dated 24 March 2016, advised Shareholders that Zambeef had received notification from RCL Foods that it wished to exercise the Put Options.

The manner of settlement of the Put Options, which is at the discretion of the Zambeef Board, can either be through the issue to RCL Foods of Zambeef Ordinary Shares, or in cash, and, subject to certain regulatory approvals being received in time, needs to take place on or before 23 of September 2016.

The Board has given careful consideration as to which method of settlement would be in the best interest of Shareholders.

Settlement of the Put Options through the issuing of Ordinary Shares would, at the current share price of 7.63p as at 29 July 2016, result in RCL being issued 48.3 per cent of the total issued ordinary shares and a corresponding dilution of existing Shareholders and would not reduce the current level of gearing within the Company. Accordingly, the Board has decided to settle the Put Options in cash. In accordance with the Settlement Agreement, Zambeef will be required to pay the amount of USD 23,385,604 as follows:

   a)    in respect of Zam Chick - USD 14,250,000; and 
   b)    in respect of Zamhatch - USD 9,135,604. 
   5.   DETAILS OF SETTLEMENT AGREEMENTS 
   5.1   Closing Agreement 

Zam Chick , Zambeef and RCL Foods have entered into an agreement dated 27 July 2016 (the "Closing Agreement") to agree the methodology of closing the sale arising from RCL Foods exercise of the Zamchick Put Option. Under the Closing Agreement, RCL Foods and Zambeef have agreed that the RCL shares market value for the Put Opition is USD 14,250,000.00 (the "Consideration"). The parties have further agreed that the Consideration in respect of the sale shares shall be payable in accordance with the shareholders agreement by Zambeef to RCL Foods on the Settlement Date.

On the Settlement Date, Zambeef and RCL Foods, or their authorised agents, shall meet in Zambia at the offices of Corpus Legal Practitioners ("Closing Meeting"). At the Closing Meeting:

a) The Parties shall comply with the provisions of the Put Option, and in particular the terms of clause 4.5 thereof, and against payment by Zambeef of the Consideration to RCL Foods (or to such other entity as RCL Foods may direct), in terms of clause 3 of the Put Option, then RCL Foods will on the Settlement Date attend to its remaining obligations in terms of the Put Option.

b) In addition to the documents to be delivered, in accordance with the terms of the Put Option, RCL Foods shall deliver the following documents to Zambeef on the Settlement Date:

i) a validly executed deed of assignment to Zambeef of all and any claims RFI may have against Zamchick;

   ii)     RCL Foods' TPIN certificate; 

iii) a duly signed Board resolution authorising the transfer of the shares subject to the Put Option to Zambeef;

iv) duly signed letters of resignation from Pierre Rousseau and Robert Field and waiving any claims that they each may have against Zamchick.

c) Pursuant to Zambian company law, a company has to have a minimum of two shareholders and consequently RCL Foods shall complete the share transfer forms in respect of the Put Option shares in the name of such entity as Zambeef may direct.

   5.2   Interim Settlement Agreement 

With regard to reaching a settlement of the Zamhatch Put Option, Zamhatch, Zambeef and RCL Foods entered into an agreement dated 27 July 2016 (the "Interim Settlement Agreeement") so as to agree the methodology of closing the sale arising from RCL Foods exercise of the Zamhatch Put Option.

As an interim settlement arrangement, the parties have agreed, without prejudice to their rights, to enable Zambeef to complete the transfer of the shares subject to the Put Option, on the Settlement Date that Zambeef will pay to RCL Foods an amount of USD 9,135,604.00 ("Interim Settlement Amount") on the Settlement Date which will be received by RCL Foods on account for purposes of completing the Put Option.

The parties further agreed that the above payment will be without prejudice to the rights of Zambeef to institute proceedings for the recovery of what it contends to be an overpayment by it to RCL Foods, which recovery shall be limited to a maximum of the difference between:

a) the Settlement Amount(as defined under the Interim Settlement Agreement); and

b) any lower amount comprising the total of the following amounts calculated on the Settlement Date:

i) The USD equivalent of the First Tranche Payment (as defined under the Interim Settlement Agreement) stipulated in Zambian Kwacha amounting to ZMW 24,800,000.00;

   ii)   The USD equivalent of the Second Tranche Payment (as defined under the Interim Settlement Agreement)stipulated in Euros amounting to EUR3,301,849.00; and 
   iii)    The Third Tranche Payment(as defined under the Interim Settlement Agreement). 

Similarly, under the Interim Settlement Agreement, the payment of the Interim Settlement Amount will be made without prejudice to the rights of RCL Foods to recover the amount which it contends is outstanding to it by Zambeef and/or Zamhatch pursuant to Interim Settlement Agreement provided that its total additional recovery under this Interim Settlement Agreement shall not exceed the amount of USD 1,023,570.00. The potential disputes are to be resolved in a manner as contemplated under the Interim Settlement Agreeement.

On the Settlement Date, Zambeef and RCL Foods, or their authorised agents, shall meet in Zambia at the offices of Corpus Legal Practitioners ("Closing Meeting"). At the Closing Meeting:

a) The Parties shall comply with the provisions of the Put Option, and in particular the terms of clause 4.5 thereof, and against payment by Zambeef of the Consideration to RCL Foods (or to such other entity as RCL Foods may direct), in terms of clause 3 of the Put Option, then RCL Foods will on the Settlement Date attend to its remaining obligations in terms of the Put Option;

b) In addition to the documents to be delivered, in accordance with the terms of the Put Option, RCL Foods shall deliver the following documents to Zambeef on the Settlement Date:

i) a validly executed deed of assignment to Zambeef of all and any claims RFI may have against Zamhatch;

   ii)     RCL Foods' TPIN certificate; 

iii) a duly signed Board resolution authorising the transfer of the shares subject to the Put Option to Zambeef;

iv) duly signed letters of resignation from Pierre Rousseau and Robert Field and waiving any claims that they each may have against Zamhatch.

c) Since in Zambia a company has to have a minimum of two shareholders RCL Foods shall complete the share transfer forms in respect of the Put Option shares in the name of such entity as Zambeef may direct.

The Company entered into financing discussions with CDC. These discussions have culminated in the Company entering into the Investment Agreement, whereby CDC will invest USD 65,000,000 of new capital into the Company via the acquisition of a combination of new Ordinary Shares, and new Convertible Redeemable Preference Shares.

The investment will be as follows:

a) the issue of 52,601,435 new Ordinary Shares to CDC that will represent a 17.5 per cent shareholding in the Company through a private placement. The Ordinary Shares are being issued at a subscription price of USD 0.18 a Share and will generate a total cash inflow of USD 9.5 million for the Company; and

b) the issue of 100,057,658 new Convertible Redeemable Preference Shares to CDC through a private placement. The Convertible Redeemable Preference Shares are being issued at a subscription price of USD 0.555, subject to the terms set out in paragraph 6.4 and 6.5 below and will generate a total cash inflow of USD 55.5 million.

   6.   MATERIAL TERMS OF THE INVESTMENT AGREEMENT 

The Preference Shares shall have the following rights:

   6.1   Income 

Out of the profits available for distribution, Preference Shareholders shall be entitled to receive the same dividend per Preference Share as the Ordinary Shareholders are entitled to receive per Ordinary Share ("Preference Share Dividend").

The Preference Share Dividend shall be paid at the same time as any dividend paid to the Shareholders of Ordinary Shares.

The Preference Share Dividend, shall following a resolution of the Directors declaring the Preference Share Dividend, become a debt due from and immediately payable by the Company to Preference Shareholders.

The Company shall pay the Preference Share Dividend to such bank accounts as Preference Shareholders may notify to the Company in writing from time to time.

   6.2   Voting 

Each Preference Shareholder shall, in respect of its Preference Shares, have the right to receive notice of, attend and speak at every general meeting of the Company and shall have the right to vote at such meetings.

The Preference Shares shall have the right to four votes for every five Preference Shares held. This would give CDC accumulated voting rights, from ordinary and preference shares, totalling 34.85 per cent.

If one of the following events occurs, each Preference Share shall, at the Preference Shareholders' sole option and on notice to the Company, carry the right to three votes for every 1 Preference Share held:

a) the Company fails to convert any Preference Shares into Ordinary Shares on the Preference Shareholders' request (pursuant to paragraph 6.3 below); or

b) an ESG Default occurs in respect of a Group company.

   6.3   Capital 

On any liquidation, dissolution or winding up of the Company (Liquidation Event), the proceeds from the Liquidation Event remaining after the payment of the Company's liabilities shall (to the extent that the Company is lawfully able to do so) be distributed as follows:

a) first, a sum equal to any arrears accruals of the Preference Share Dividend up to the Conversion Date;

b) second, each Preference Shareholder will receive the Redemption Price per Preference Share held; and

c) third, any remaining funds will be distributed proportionately among the Ordinary Shareholders.

   6.4   Conversion 

6.4.1 Subject to paragraph 6.5, each Preference Shareholder shall be entitled to convert all or part of its Preference Shares into Ordinary Shares ("Conversion") at any time on giving the Company 30 Business Days' written notice ("Conversion Notice"). The relevant Preference Shares shall convert on the date specified in the Conversion Notice ("Conversion Date") unless redeemed beforehand in accordance with the provisions of this Section 6.

6.4.2 The number of Ordinary Shares into which the Preferences Shares convert shall be determined in accordance with the following formula (the "Conversion Formula"):

a) if the Preference Shares are being converted before the eighth anniversary of Completion, each Preference Share shall convert into one Ordinary Share; or

b) if the Preference Shares are being converted after the eighth anniversary of Completion, each Preference Share shall convert into 3.0833 (recurring) Ordinary Shares (rounded down to nearest whole number of Ordinary Shares).

6.4.3 If a person (or persons acting in concert) ("Offeror") makes an offer to the Shareholders for 25 per cent or more of the Ordinary Shares (excluding any existing holding of Ordinary Shares of the Offeror) ("Takeover Offer"), then CDC shall have the right to participate in the Takeover Offer by converting all or part of its Preference Shares into Ordinary Shares:

a) on the basis of one Ordinary Share for each Preference Share, where the offer price pursuant to the Takeover Offer ("Offer Price") is equal to, or is more than USD 0.555 per Ordinary Shares;

b) on the basis of 1.52 Ordinary Shares for each Preference Share, where the Offer Price is equal to, or is more than USD 0.365 but less than USD 0.555; or

c) on the basis of 3.0833 Ordinary Shares for each Preference Share, where the Offer Price is less than USD 0.365 per Ordinary Shares.

6.4.4 The Company shall notify the Preference Shareholders of a Takeover Offer within five Business Days of the Company being notified or becoming aware of a Takeover Offer. The Preference Shareholders may notify the Company in writing of their intention to exercise their right of Conversion pursuant to paragraph 6.4.3 above at any time prior to the deadline for Ordinary Shareholders to accept the Takeover Offer. Conversion of the Preference Shares shall be conditional on the Takeover Offer becoming wholly unconditional and shall take effect immediately prior to the completion of the Takeover Offer.

6.4.5 On any Conversion pursuant to paragraphs 6.4.2(b), 6.4.3(a) and 6.4.3(c), where the number Ordinary Shares to be received pursuant to the Conversion exceeds the number of Preference Shares being converted, the excess Ordinary Shares shall be paid up by way of capitalisation of share premium account.

The Company shall maintain:

   a)      sufficient distributable reserves or share premium account to enable a Conversion; and 
   b)     sufficient authorised share capital to issue the Ordinary Shares pursuant to a Conversion. 

6.4.6 Each Preference Shareholder exercising its right to convert its Preference Shares shall deliver its share certificate (or an indemnity in a form reasonably satisfactory to the Company for any lost share certificate) for the Preference Shares being converted (together with such other evidence (if any) as the Company may reasonably require to prove good title to such Preference Shares) to the Company at its registered office for the time being.

6.4.7 On the Conversion Date, the relevant Preference Shares shall unless redeemed prior to Conversion (without any further authority than contained in these sections) stand converted into Ordinary Shares on the basis of the Conversion Formula and the Ordinary Shares resulting from the conversion shall rank pari passu in all respects with the existing issued Ordinary Shares in the capital of the Company.

6.4.8 On the Conversion Date, the Company shall enter the holder of the converted Preference Shares on the register of the Ordinary Shareholders of the Company as the holder of the relevant number of Ordinary Shares arising on conversion of the relevant Preference Shares and, subject to paragraph 6.4.5, the Company shall within five (5) Business Days of the Conversion Date, deliver a definitive share certificate for the relevant number of Ordinary Shares to such Preference Shareholder.

6.4.9 If any consolidation or sub-division or reduction of capital or return of capital or dividends or other reconstruction or adjustment relating to the equity share capital of the Company and any other amalgamation or reconstruction affecting the equity share capital of the Company (Reorganisation) shall take place prior to any Conversion, the Conversion Formula shall be adjusted accordingly to take into account the effect of the Reorganisation.

6.4.10 On Conversion, any fractional Shares and corresponding voting rights shall be rounded down to the nearest whole number.

   6.5   Redemption 

6.5.1 Subject to paragraph 6.5.2 and 6.5.3, the Company shall have the right to redeem all or part of the Preference Shares at the Redemption Price in accordance with Section 59 of the Companies Act ("Redemption"). The Company shall give 30 Business Days written notice ("Redemption Notice") to the Preference Shareholders of its intention to carry out a Redemption.

6.5.2 If a Redemption Notice is served:

a) during the five years following Completion, such Redemption shall not result in CDC's shareholding in the Company falling below the CDC Core Holding; and

b) after the fifth anniversary of Completion and such Redemption would result in CDC's holding of Preference Shares falling below 70,000,000 Preference Shares, the Company shall redeem all of CDC's Preference Shares.

6.5.3 The right of the Company to redeem Preference Shares pursuant to paragraph 6.5 shall be subject to the right of the Preference Shareholders to convert the Preference Shares that are the subject of a Redemption Notice. If a Conversion Notice is not served during the 30 Business Days following receipt of a Redemption Notice (Conversion Period), then the Company may proceed with the Redemption within 120 days after the earlier of (i) the expiry of the Conversion Period; and (ii) receipt of written confirmation from the relevant Preference Shareholders that they do not intend to serve a Conversion Notice. If there is no Redemption within such 120 day period, then the Preference Shareholders shall be entitled to convert their Preference Shares in accordance with the provisions of this section 5.

6.5.4 On the Redemption Date, the Company shall pay the Redemption Price on each of the Preference Shares redeemed. At the same time, it shall pay any arrears or accruals of the Preference Share Dividend due on the Redemption Date. The Preference Share Dividends on the redeemed shares shall stop accruing from the date on which the Redemption Price is paid.

6.5.5 On any Redemption Date, the Company shall pay to each registered Preference Shareholder the Redemption Price, following which the redeemed Preference Shares shall be deemed to be cancelled pursuant to Section 58(8)(a) of the Companies Act and each holder of a redeemed Preference Share shall surrender to the Company the certificate for the Preference Shares that are redeemed (or an indemnity in a form reasonably satisfactory to the Board in respect of any lost share certificate) for cancellation by the Company. If any certificate (or indemnity) so surrendered includes any Preference Shares that are not redeemed at that time, the Company shall issue a new share certificate for the balance of the Preference Shares which have not been redeemed. If there is more than one Preference Shareholder, any redemption shall be made among such holders pro rata (as nearly as possible) to their respective holdings.

6.5.6 The Company shall not redeem more than such number of Preference Shares as it is lawfully able to redeem. If there is more than one Preference Shareholder, the Preference Shares shall be redeemed in proportion to each Preference Shareholder's holding of Preference Shares.

6.5.7 If CDC elects to convert some or all of its Preference Shares (other than a Conversion pursuant to paragraph 6.5.3) and such Conversion would result in CDC holding more than 34.9 per cent. of the issued Ordinary Share capital, the Company shall be entitled to redeem such number of Preference Shares elected to be converted by CDC at the Redemption Price, as is required to ensure that CDC's holding of the Company will not exceed 34.9 per cent. of the issued Ordinary Share capital following Conversion, provided that this paragraph 6.5.7 shall cease to apply from and including the date falling eight years after the Completion Date.

   6.6   Further Issues and Variation of Rights 

The Company shall not create or issue any other preference share ranking in some, all or any respects in priority to the Preference Shares.

The special rights attached to the Preference Shares may be varied with the consent of Preference Shareholders representing 75 per cent of the Preference Shares in issue but not otherwise.

   6.7   Unresolved ESG Action Plan items and implication for dividend payments 

If, on any Board Review Date, there are matters in the ESG Action Plan which have not been completed by the dates prescribed for them in the ESG Action Plan as determined by the CDC (acting reasonably) ("Pending ESG Items"), the Company shall pay such amount as is determined by CDC (acting reasonably) ("ESG Amount") to implement the Pending ESG Items prior to the next Board Review Date ("Next Board Review Date"), into an escrow account ("Escrow Account"). The Escrow Account shall be operated by an escrow agent reasonably satisfactory to CDC and on terms reasonably satisfactory to CDC. No amount shall be released out of the Escrow Account without the prior written consent of CDC and the costs of maintaining the escrow account shall be borne by the Company. Subject to the following paragraph, to the extent that following payment of the ESG Amount into the Escrow Account and provided that that the ESG Amount has been paid into the Escrow Account, the Company has distributable reserves, the Company shall be entitled to declare or pay dividends to its Shareholders.

If, on the Next Board Review Date, the Pending ESG Items or any other matters in the ESG Action Plan to be implemented between the last Board Review Date and the current Next Board Review Date ("Additional Pending ESG Items") have not been completed by the dates prescribed for them in the ESG Action Plan or by CDC, then the Company shall not declare or pay dividends until the Pending ESG Items and the Additional Pending ESG Items have been implemented in a form reasonably satisfactory to CDC.

6.8 Conditions Precedent

Completion of the Proposed Transaction is conditional on the following Conditions Precedent having been fulfilled.

   a)    Approval, by Shareholders, at a duly convened EGM, of the following: 

i. increasing the authorised share capital of Zambeef;

ii. issuing, via a private placement, of 52,601,435 new Ordinary Shares to CDC, which post issuance would represent a 17.5 per cent shareholding in the Company for CDC;

iii. creating a new class of Shares in the form of Convertible Redeemable Preference Shares;

iv. issuing a total of 100,057,658 Convertible Redeemable Preference Shares to CDC on a private placement basis;

v. payment of up to USD 14,250,000 and USD 9,135,604 to RCL Foods to finance in cash the Company's obligation to acquire RCL Foods' shares in Zam Chick and Zamhatch respectively pursuant to the Put Options exercised on 23 March 2016.

b) the COMESA Competition Commission having approved the Proposed Transaction in accordance with the COMESA Competition Regulations (either unconditionally or with undertakings or conditions reasonably acceptable to the party to whom the relevant condition or undertaking applies);

   c)   consent from the relevant lenders approving the terms of the Proposed Transaction; 

d) the unconditional approval of SEC and LuSE to issue the shares to CDC in accordance with the terms of the Investment Agreement;

e) the registration and listing of the Ordinary Shares by the SEC and LuSE respectively; and

   f)   certain transaction documents being in agreed form. 
   6.9   Effective date 

The Investment Agreement will become effective on the date on which it is duly and validly executed by the parties thereto.

6.10 Completion Matters

On Completion, CDC shall:

a) pay in cash to the Company an amount equal to the aggregate Subscription Price in USD less any transaction costs payable by the Company to CDC;

b) deliver to the Company letters of appointment for the CDC representatives on the Board and consents to act as Directors of the Company; and

   c)   deliver to the Company a copy of the Relationship Agreement duly executed by CDC. 

On Completion, the Company shall:

a) adopt the New Articles by filing the New Articles at the Companies Registry together with the Resolutions;

b) adopt the Board Plan;

   c)   adopt the Post-Completion Action Plan; 

d) adopt the ABC Plan;

e) procure the admission of the Ordinary Shares to be issued to CDC pursuant to the Investment Agreement to trading on AIM in accordance with the AIM Rules;

f) appoint such persons as CDC shall nominate as CDC representatives on the Board with effect from Completion;

g) allot and issue the Subscription Shares to CDC credited as fully paid and free from encumbrances and enter CDC's name in the register of members;

h) deliver or procure the delivery to CDC the following documents in a form and manner satisfactory to CDC (acting reasonably):

i. certified copies of each of the bank consents (as further detailed in the Investment Agreement);

ii. evidence of the registration of the new Ordinary Shares issued to CDC with SEC;

iii. certified copies of:

   --   the Resolutions; and 
   --   any approvals from the relevant Governmental authorities not already in CDC's possession 

iv. one share certificate in respect of the Preference Shares, one share certificate in respect of the Ordinary Shares to be held by a custodian for trading on AIM and one share certificate in respect of the Ordinary Shares to be held by a custodian for trading on the LUSE, in accordance with the Trading Notice;

   v.   duly executed copies of each Transaction Document (as applicable) by the Company; 

vi. evidence of the Ghanaian Concessionary Agreement having been duly stamped in accordance with the Stamp Duty Act 2005;

vii. evidence of the Zamhatch Lease and the Zam Chick Lease having been duly registered with the Zambian land registry in accordance with applicable law;

viii. deliver to CDC duly executed executive Directors' service agreements (replacing existing service agreements) in the Agreed Form confirming terms of employment for each of Carl Irwin, Francis Grogan and Yusuf Koya;

ix. deliver to CDC duly executed side letters to existing non-executive directors' letter of appointments in the Agreed Form confirming terms of appointment by each of Dr Jacob Mwanza, Lawrence Sikutwa and John Rabb;

x. deliver to CDC a duly executed letter of appointment for Graham Clark in the Agreed Form in relation to his appointment as a Director of the Company (which will be consistent with the form of letter of appointment pursuant to which Dr Jacob Mwanza, Lawrence Sikutwa and John Rabb are appointed as Directors of the Company);

xi. a written confirmation in the Agreed Form from Cargill Zambia (2009) Limited and Zamanita Limited confirming that they will not terminate the Soybean Offtake Agreement in connection with the transactions contemplated in the Investment Agreement;

xii. a written confirmation in the Agreed Form from Zamanita Limited confirming that it will not terminate the Oil Distribution Agreement in connection with the transactions contemplated in the Investment Agreement; and

xiii. evidence of the Ghanaian Subsidiary's renewal of its registration with the Ghana Investment Promotion Centre.

6.11 Reserved Matters

Under the Investment Agreement, there are various Reserved Matters that require the consent of CDC following Completion. The Reserved matters include the undertaking that the Company will not, and will procure that no Group company will:

a) make a charitable donation to any charity other than the charities listed and for the amounts under the Investment Agreement;

b) make a political donation or contribution;

   c)   make any material changes to the ESG plan; 

d) remove any ESG consultant appointed by CDC; or

e) remove or appoint a member of the ESG Committee or any other committee of the board of a Group company;

   f)   Take steps, including the passing of any resolution, to wind up or dissolve any Group company; 

g) alter the alteration of the accounting reference date of any Group company or the alteration of the accounting policies or practices of any Group company except as required by law or to comply with changes to an accounting standard;

h) undertake any amalgamation, demerger, merger, corporate reconstruction or consolidation of any Group company however effected;

i) change, appoint, terminate the appointment of the chairman, chief executive officer, chief financial officer or chief operations officer of the Company; and

   j)   amend or materially deviate from any of the Reserved Matters. 

During the period between signing and Completion of the Investment Agreement, the Company shall not enter into, vary or terminate any contract with a material value in excess of USD 500,000 (other than in the ordinary course of business), without the prior written consent of CDC.

   7.   SUMMARY OF THE RELATIONSHIP AGREEMENT 

A Relationship Agreement will be entered into on Completion between the Company, Strand Hanson (in its capacity as nominated adviser to the Company) and CDC, pursuant to which CDC will undertake, inter alia, that it will, and will procure that each of its related parties will, exercise its voting rights to procure (subject at all times to any applicable statutory, fiduciary and other duties and obligations generally under the law and/or applicable rules and regulations) that, inter alia, (i) the Group is capable of carrying on its business independently; (ii) the Directors act in the best interests of all Shareholders, independently; and (iii) all transactions, agreements and arrangements between the Group and CDC will be conducted at arm's length and on normal commercial terms approved by the directors who are independent of CDC. These obligations remain incumbent upon CDC until such time as CDC and its associates hold no shares in the Company or the Company's shares cease to be admitted to AIM.

For so long as CDC holds 10 per cent. or more of the voting rights of the Company, CDC shall have the right to appoint two non-executive directors. For so long as CDC holds more than 3 per cent. but less than 10 per cent. of the voting rights of the Company, CDC shall have the right to appoint one non-executive director. At Completion, the Board will then extend from seven to ten directors, including three executive directors. A plan will be adopted with effect from Completion to further strengthen the board following Completion. The chairman of the Company, from time to time, shall not be replaced without the prior written consent of CDC. CDC may appoint one observer to the Board. An observer shall be entitled to the same access to information as the directors and shall receive all notices and materials delivered to their directors.

Under the Relationship Agreement, any person who acquires from CDC 120,000,000 or more Shares ("Assignee") shall for so long as it holds 30 per cent. or more of the voting rights of the Company, be entitled to appoint two non-executive directors to the board and to remove from office any person so appointed.

In the event of any conflict or inconsistency between the provisions of the Relationship Agreement and the articles of association of the Company or between the Relationship Agreement and the Investment Agreement, the provisions of the Investment Agreement prevails between CDC and Zambeef. It is also proposed that the articles of association of the Company are amended to incorporate the terms and conditions of the Convertible Redeemable Preference Shares and to incorporate certain corporate governance rights agreed with CDC pursuant to the terms of the Investment Agreement.

   8.   CATEGORISATION AND AUTHORITY TO IMPLEMENT THE PROPOSED TRANSACTION 

The Proposed Transaction is classified as a Category 1 Transaction under Section 9 of the LuSE Listing Rules and is in accordance with Section 5.51 of the LuSE Listing Rules. As such, the Company requires the authority of Shareholders to implement the Proposed Transaction by means of the adoption of the Resolutions, as set out in the Notice of Extraordinary General Meeting.

   9.   FINANCIAL INFORMATION 

Pro forma financial effects of the Proposed Transaction on Zambeef's financials:

The purpose of the table below is to illustrate the unaudited pro forma financial effects of the Proposed Transaction and the implication of the utilisation of the funding and such the unaudited pro forma financial effects, as set out below, are the responsibility of the Directors.

The unaudited pro forma financial effects are presented in a manner consistent with the basis on which the historical financial information of Zambeef has been prepared and in accordance with Zambeef's accounting policies.

The unaudited pro forma financial effects have been presented for illustrative purposes only and, because of their nature, may not give a fair reflection of Zambeef's financial position, changes in equity or of the effect on future earnings post the implementation of this transaction.

 
 ZMW                   The Group as       The Group Post       Change 
                       at 31.03.2016    Proposed Transaction     per 
                                                                cent. 
 EPS                       0.36                0.24             (33) 
 Headline EPS 
  (*)                      0.36                0.24             (33) 
 NAVPS                     6.25                8.75              40 
 NTAVPS                    6.19                8.23              33 
 Preference Shares 
  in Issue                  -               100,057,658         100 
 Ordinary Shares 
  in Issue             247,978,195          300,579,630          21 
 

(*) Headline EPS is the measurement of a company's earnings based solely on operational and capital investment activities. It specifically excludes any income that may relate to staff reductions, sales of assets, or accounting write-downs.

The Investment Agreement shall complete on the Completion Date, being the fifth business day after the date on which the last of the Conditions Precedent to be satisfied or waived under the Investment Agreement has been satisfied or waived in accordance with the terms of the Investment Agreement.

DEFINITIONS

In this Announcement, the following expressions shall have the following meanings unless the context otherwise requires:

 
 "ABC Plan"            means policies and practical procedures 
                        in the Agreed Form to prevent extortion, 
                        fraud, bribery, corruption and financial 
                        crime in accordance with local law 
                        requirements and international best 
                        practice, including anti-corruption 
                        and anti-money laundering best practice 
 "Agreed Form"         means a form reasonably satisfactory 
                        to CDC having regard to applicable 
                        regulatory requirements. 
 "AIM"                 the market of that name operated by 
                        London Stock Exchange plc. 
 "AIM Rules"           means together the AIM Rules for Companies 
                        and the rules for AIM Nominated Advisers. 

 "AIM Rules            the provisions of the AIM Rules for 
  for Companies"        Companies and related guidance notes 
                        published by the London Stock Exchange 
                        (as amended or reissued from time 
                        to time). 
 "Board" or            the Directors of the Company. 
  "Board of 
  Directors" 
  or "Directors" 
 "Board Plan"          means a plan in the Agreed Form to 
                        strengthen the Board following Completion. 
 "CDC"                 CDC Group plc, a development finance 
                        institution wholly owned by the government 
                        of the United Kingdom, further information 
                        on which is disclosed in this announcement. 
 "CDC Core             34.9 per cent of the issued share 
  Holding"              capital of the Company. 
 "Circular"            the circular to be sent to Shareholders, 
                        which will include the Notice of Extraordinary 
                        General Meeting and the Form of Proxy/Form 
                        of Instruction in relation to the 
                        Extraordinary General Meeting. 
 "Company"             Zambeef Products Plc, a public limited 
  or "Zambeef"          company incorporated in Zambia on 
                        24 June 1994 as a private limited 
                        company, converted into a public limited 
                        company on 2 January 2003 and whose 
                        company registration number is 31824 
                        and whose registered office is located 
                        at Plot 4970, Manda Road, Industrial 
                        Area, Lusaka, Zambia. 
 "Companies            The Companies Act, Chapter 388 of 
  Act"                  the Laws of Zambia. 
 "Completion           the date scheduled for the completion 
  Date" or              of the Proposed Transaction being 
  Completion"           the fifth business day after the date 
                        on which the last of the Conditions 
                        Precedent to be satisfied or waived 
                        under the Investment Agreement, is 
                        satisfied or waived in writing by 
                        CDC. 
 "Conditions           the conditions precedent that must 
  Precedent"            be fulfilled prior to completion of 
                        the Proposed Transaction, as set out 
                        in this announcement. 
 "Convertible          means convertible redeemable shares 
  Redeemable            with a par value of ZMW 0.01 each 
  Preference            in the issued share capital of the 
  Shares" or            Company, distinct from the Ordinary 
  "Preference           Shares, with specific rights that 
  Shares"               are unique to the holders as set out 
                        in the Investment Agreement. 
 "Depositary"          Computershare Investor Services Plc. 
 "Depositary           holders of the Depositary Interests. 
  Interest 
  Holders" 
 "Depositary           uncertificated depositary interests 
  Interests"            issued by the Registrar and representing 
                        Ordinary Shares. 
 "Disclosure           means the letter of the same date 
  Letter"               as the Investment Agreement from the 
                        Company to CDC disclosing certain 
                        matters in relation to the Warranties, 
                        together with all documents attached 
                        to it or listed in any schedule to 
                        it. 
 "Extraordinary        the extraordinary general meeting 
  General               of Shareholders to be held at 10:00 
  Meeting"              am (GMT+1) on Friday 9 September 2016, 
  or "EGM"              at the Taj Pamodzi Hotel, Church Road, 
                        Lusaka, to consider and, if deemed 
                        fit, approve the Proposed Transaction. 
 "ESG"                 means environmental, social and governance. 
 "Exchange             means the ZMK to USD mid-rate as published 
  Rate"                 on the Bank of Zambia website on the 
                        date of payment of the Preference 
                        Dividend. 
 "Form of              the form of instruction to be completed 
  Instruction"          only by Depositary Interest Holders, 
                        to accompany the Circular for use 
                        at the Extraordinary General Meeting. 
 "Form of              the form of proxy to accompany the 
  Proxy"                Circular for use at the Extraordinary 
                        General Meeting. 
 "Funding"             the funding which totals USD 65.0 
                        million, payable on the Completion 
                        Date, via the issuance of 52,601,435 
                        new Ordinary Shares at a price of 
                        USD 0.18 per Ordinary Share to CDC, 
                        totalling USD 9.5 million; and the 
                        issuance of 100,057,658 Convertible 
                        Redeemable Preference Shares at a 
                        price of USD 0.555 per Convertible 
                        Redeemable Preference Share, totalling 
                        USD 55.5 million. 
 "Ghanaian             means the concessionary agreement 
  Concessionary         between Shoprite Ghana Limited and 
  Agreement"            the Ghanaian Subsidiary dated 24 May 
                        2013 
 "Ghanaian             means Master Meats (Ghana) Limited, 
  Subsidiary"           company number CA 33,344 and whose 
                        registered office is at Wharehouse 
                        A 29 Spintex Road, Accra. 
 "Group" or            the Company together with its subsidiaries 
  "Zambeef              and for purposes of the Proposed Transaction 
  Group"                includes Zamhatch and Zam Chick . 
 "Investment           the agreement entered into on or around 
  Agreement"            the date of this Agreement between 
                        the Company and CDC and which sets 
                        out the terms of the Proposed Transaction. 
 "LSE"                 London Stock Exchange plc. 
 "LuSE"                the Lusaka Securities Exchange Limited 
                        (formerly Lusaka Stock Exchange), 
                        a company incorporated in Zambia and 
                        licensed to operate as a stock exchange 
                        under the Securities Act, Chapter 
                        354 of the Laws of Zambia. 
 "LuSE Listing         the Lusaka Securities Exchange requirements 
  Rules"                that govern the activities of that 
                        exchange. 
 "LuSE Sponsoring      Pangaea Securities Limited, a company 
  Broker" or            incorporated in Zambia and regulated 
  "Pangaea"             by the Securities and Exchange Commission, 
  or "Sponsoring        with company registration number 33424 
  Broker"               and registered office at Pangaea Office 
                        Park, First Floor, Great East Road, 
                        P.O. Box 30163, Lusaka, Zambia. 
 "New Articles"        means the articles of association 
                        of the Company (as amended from time 
                        to time) (which at Completion will 
                        be those in Agreed Form and to be 
                        adopted by the Resolutions). 
 "Notice"              the Notice of the Extraordinary General 
                        Meeting which will form part of the 
                        Circular. 
 "Oil Distribution     means the agreement dated 2 February 
  Agreement"            2015 and entered into between Zamanita 
                        Limited and Zambeef Retailing Limited 
                        in relation Zambeef pursuant to which 
                        Zambeef Retailing Limited agrees to 
                        purchase certain products from Zamanita 
                        Limited only 
 "Ordinary             the holders of Ordinary Shares. 
  Shareholders" 
 "Ordinary             ordinary shares with a par value of 
  Shares"               ZMW 0.01 each in the issued share 
                        capital of the Company. 
 "Post-Completion      means the post completion action plan 
  Action Plan"          of the Group (including the ESG action 
                        plan as detailed in the Investment 
                        Agreement) in the Agreed Form which 
                        shall include: 
 
                        (a) a summary of the key points for 
                        the Group companies arising out of 
                        the Transaction Documents and of the 
                        key recommendations arising from CDC's 
                        due diligence together with an action 
                        plan to implement each such action 
                        point and recommendation; 
 
                        (b) target dates for the implementation 
                        of each such action point and recommendation; 
                        and 
 
                        (c) a budget of costs for each such 
                        point and recommendation. 
 "Preference           holders of the Convertible Redeemable 
  Shareholders"         Preference Shares. 
 "Proposed             the issuance of 52,601,435 new Ordinary 
  Transaction"          Shares to CDC by private placement 
                        to CDC and the creation and issue 
                        of 100,057,658 Convertible Redeemable 
                        Preference Shares in the Company by 
                        private placement to CDC as per the 
                        Investment Agreement. 
 "Put Options"         Zam Chick Put Option and Zamhatch 
                        Put Option, collectively, the Options 
                        granted to RCL Foods when it and Zambeef 
                        entered into two separate transactions 

                        relating to Zam Chick Limited ("Zam 
                        Chick") and Zamhatch Limited ("Zamhatch") 
                        and which were announced on the SENS, 
                        via RNS and the Zambian print media 
                        on 4 February 2013 and 30 May 2013, 
                        respectively. 
 
   "Redemption           means the Subscription Price plus 
   Price"                a return of 12 per cent per annum 
                         (compounding annually), subject to 
                         a minimum price equal to the sum of 
                         USD 0.77 less the aggregate of all 
                         Preference Share Dividends paid with 
                         respect to each Preference Share. 
                         Where the Preference Share Dividends 
                         are paid in a currency other than 
                         US Dollars then for the purpose of 
                         determining the Redemption Price the 
                         amount of the Preference Share Dividend 
                         shall be converted into USD using 
                         the Exchange Rate. 
 "Relationship         The agreement dated on or around the 
  Agreement"            Completion Date and entered into between 
                        CDC, the Company and Strand Hanson 
                        governing the actions of CDC as a 
                        substantial shareholder of Zambeef. 
 "Resolutions"         the special and ordinary resolutions 
                        authorising, inter alia, the implementation 
                        of the Proposed Transaction that will, 
                        in compliance with the LuSE Listing 
                        Rules, be tabled at the Extraordinary 
                        General Meeting for the consideration 
                        and, if deemed fit, approval of the 
                        Shareholders and which are set out 
                        in the Notice. 
 "RCL Foods"           Rainbow Farms Investments Proprietary 
                        Limited, a company incorporated and 
                        operating in the Republic of South 
                        Africa. 
 "RNS"                 regulatory news service, a platform 
                        through which institutional investors 
                        and the general public are informed 
                        on the corporate activities a company 
                        listed on the respective exchanges 
                        in the UK is undertaking. 
 "SEC"                 the Securities and Exchange Commission 
                        of Zambia, a statutory body established 
                        under the Securities Act. 
 "Securities           the Securities Act Chapter 354 of 
  Act"                  the Laws of Zambia. 
 "SENS"                LuSE platform through which institutional 
                        investors and the general public are 
                        informed on the corporate activities 
                        a company listed on their respective 
                        exchanges is undertaking. 
 "Shares"              all classes of shares in the issued 
  or "Zambeef           share capital of the Company. 
  Shares" 
 "Shareholder(s)"      certified holder(s) of Ordinary Shares 
                        in the Company and Depositary Interest 
                        Holders. 
 "Soybean              means the agreement dated 2 February 
  Offtake Agreement"    2015 and entered into between Zamanita 
                        Limited, Cargill Zambia (2009) Limited 
                        and the Company in relation to the 
                        sale of soybeans by the Company to 
                        Zamanita Limited and the grant of 
                        a right of first refusal granted to 
                        Cargill Zambia (2009) Limited 
 "Subscription         a) in the case of the Ordinary Shares, 
  Price"                USD 0.180 per Ordinary Share; and 
                        b) in the case of the Preference Shares, 
                        USD 0.555 per Preference Share. 
 "Subscription         means 52,601,435 Ordinary Shares (representing 
  Shares"               17.5 per cent of the issued share 
                        capital of the Company following Completion) 
                        and 100,057,658 Convertible Redeemable 
                        Preference Shares. 
 "Trading              within five Business Days prior to 
  Notice"               the Completion Date, CDC shall notify 
                        the Company of whether it wishes to 
                        have its Ordinary Shares held by a 
                        custodian for trading on AIM or a 
                        custodian for trading on the LUSE. 
 "Transaction          means the Investment Agreement, the 
  Documents"            New Articles, the Relationship Agreement, 
                        the Disclosure Letter and any agreement, 
                        document or deed referred to in the 
                        Investment Agreement or in the agreements, 
                        documents or deeds referred to in 
                        them, to which any member of the Group 
                        is, or will be a party. 
 "USD" or              United States Dollars, the official 
  "$" or "dollars"      currency of the United States of America. 
 "Warranties"          means the warranties set out in the 
                        Investment Agreement and each and 
                        any of them. 
 "Zamchick             means the 50 year sub-lease over farm 
  Leases"               633 Chisamba commencing on 1 January 
                        2013 from the Company to Zam Chick 
                        Limited. 
 "Zam Chick            a put option granted to RCL Foods 
  Put Option"           to sell the whole of its shareholding 
                        and all of its claims whether on loan 
                        account or otherwise in Zam Chick 
                        to the Company in accordance with 
                        the terms of the Zam Chick Agreement 
                        dated 1 February 2013. 
 "Zamhatch             means the 50 year sub-leases over 
  Leases"               farm 4450, 4451 and 5388 Mpongwe commencing 
                        on 1 April 2015 from the Company to 
                        Zamhatch Limited. 
 "Zamhatch             a put option granted to RCL Foods 
  Put Option"           to sell the whole of its shareholding 
                        and all of its claims whether on loan 
                        account or otherwise in Zamhatch to 
                        the Company in accordance with the 
                        terms of the Zamhatch Agreement dated 
                        29 May 2013. 
 "ZMW" or              the lawful currency of Zambia, being 
  "Kwacha"              the Zambian Kwacha as rebased or any 
                        successor currency. 
 

This information is provided by RNS

The company news service from the London Stock Exchange

END

AGREASPLEAKKEEF

(END) Dow Jones Newswires

August 04, 2016 02:01 ET (06:01 GMT)