Zambia-based ZCCM Investments Holdings said it would be offering stock to its existing shareholders for sale. Proceeds from the share sale would be used by the firm to pay off its debt and seek opportunities in new developments. The Government of Zambia holds an 87.6% share in the company while private equity investors hold a 12.4% stake.
In an emailed statement to Bloomberg, ZCCM-IH said it would use a portion of the funds to reduce its USD 379 million debt it owed to the government. The investment company said, "This huge debt has suppressed the value of the company and made the company unattractive to investors and the market." ZCCM-IH has minority investments in the local businesses of Glencore Xstrata and Vedanta Resources.
According to a Bloomberg report, some shareholders had asked the Securities and Exchange Commission in Zambia to investigate ZCCM-IH. ZCCM purportedly received a USD300 million loan from the government, of which the minority shareholders claimed that no such loan existed. The minority shareholders added that the loan was said to be transferred to the company, and that Paris Club group of creditor nations had canceled the debt back in 2005.
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