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Monday, February 10, 2025
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Zambeef in Money Trouble?…Investor BII hires financial adviser

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British International Investment (BII), which is invested in Zambeef Products PLC, has hired French firm Lazard Inc. to advise it on the way forward regarding its Zambeef investment.

Lazard is the same company hired by the Patriotic Front administration to advise on Zambia’s debt in 2020.

BII, formerly CDC Group plc, invested US$65 million in Zambeef in 2016. At that time, the company had a market capitalization of US$59 million. That is now down to US$ 36 million as at July 4.

BII, the UK’s development finance arm, holds 52.6 million ordinary shares and 100 million convertible preference shares in Zambia’s largest vertically integrated food production and retailing company.

The convertible preference shares are due for redemption on September 16 for about US$140 million cash or converted into 300 million ordinary stock. It appears the cash redemption would be a tall order for Zambeef, which reported less than US$13 million in cash and equivalents at the end of its 2023 financial year.

If BII opts to convert its preference shares, it would increase its shareholding from the current 17.5% to about 60% and trigger a mandatory offer to buy out other shareholders.

The reasons for Zambeef’s money woes are not explicitly known but commentators attribute its debt-fueled expansion drive and the effects of Zambia’s debt default as plausible contributing factors.

Whatever the causes, the company is haemorraging cash.

Zambeef’s market capitalization peaked at about US$300 million mid of the previous decade. It is listed on the Alternative Investment Market of the London Stock Exchange with its primary listing on the Lusaka Stock Exchange.

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