According to a recent press release from the Zambian Government’s Cabinet Office, the Minister of Finance Alexander Chikwanda has officially announced that the Government is planning to finalize its stake’s reduction on ZCCM Investment Holdings (ZCCM-IH) within the next two months.
The offer to the public will be for a total of 27,961,237 shares at a price of ZMW 38 and it represents the second and last stage of the Zambian Government’s offload from over 87% to 60% stake on ZCCM-IH, that started in June 2015 with a sale of 15,850,631 shares to the Zambia’s National Pension Scheme Authority (NAPSA) for a total value of ZMW 571 million.
The sale of ZCCM-IH shares is in line with one of the Lusaka Stock Exchange listing requirements that states that one entity or person cannot hold more than 75% stake on a listed company.
In addition, the money raised from the sale, will be used in partnership with the Zambian Industrial Development Corporation (IDC) to promote economic development in the country, explained Minister Chikwanda.
According to Bloomberg, the Zambian Government seeks to cover a slowdown for this year announced in a press release from the International Monetary Fund (IMF) on 20th May stating that due to fiscal imbalances, low cooper prices, and downward pressure on the local currency, the 2015 country’s real growth would be around 5.5% down from 6.3% in the year 2013 and 5.6% in 2014.
Zambia therefore expects with this sale to reach the 7.7% real growth included in Government’s Budget 2015.
Minister Chikwanda also said that this is a great opportunity for Zambians to be part on the profits and growth of the mining sector which is the main economic activity in the country, and invited other companies to be part of the capital markets and to use its tools available not to only depend on Government’s loans to promote further the Zambia’s economic development.
ZCCM-IH’s main activity is to manage the Government’s stake in the mining sector and it holds on average 15% of the Zambian mining industry.
Since the announcement, ZCCM-IH shares which are registered in London, New York, Paris, and Lusaka, have seen movement on their price only in the Paris Stock Exchange from EUR 1.42 on 28th July to a current EUR 1.57, or 10.56% return in merely five tradable days.
