17th Sep 2019 14:20
(Alliance News) - Africa-focused food producer Zambeef Products PLC said Tuesday it has agreed to sell the Sinazongwe farming estate to Chenguang Biotech Zambia Agri-Dev Ltd for USD10 million.
Shares in Zambeef Products were 14% higher at 5.72 pence on Tuesday in London.
Chenguang Biotech is a Chinese biotechnology company which produces and supplies natural plant extraction for paprika oleoresin, capsicum oleoresin and marigold oleoresin.
On signing the agreement, Chenguang will pay a deposit of USD1 million, and then make the remaining payment on the completion date, which will be before March 15, 2020.
The Sinazongwe farm is located in the southern Zambezi valley in Zambia, and has a total land area of 2,549 hectares.
The sale is conditional on gaining approval from the Competition & Consumer Protection Commission, the Lusaka Securities Exchange and Zambeef shareholders. The sale is also dependent on Chenguang obtaining an investment licence from the Zambia Development Agency.
Net proceeds from the sale will go towards Zambeef paying down its debt, thus reducing gearing and interest costs. The proceeds, after the payment of regulatory and other costs is expected to be USD9.3 million.
"This transaction is in line with and a continuation of the group's strategic vision, which will allow Zambeef to focus on growing its core business, which is the production and retailing of cold chain meat and dairy products and stockfeed, delivered through the group's extensive processing, distribution and retail network," said Chair Jacob Mwanza.
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