The Copperbelt Energy Corporation Plc (CEC) has intensified its legal battle with Konkola Copper Mines (KCM), accusing the mining company of unjustly refusing to pay 40 percent of a US$29.6 million debt owed under a court-approved Creditor’s Scheme of Arrangement (CSA).
CEC, a Class 2 creditor under the CSA, claims that KCM is delaying the payment on the pretext of an ongoing appeal.
The debt stems from a June 28 High Court ruling that sanctioned the scheme, requiring KCM to allocate US$225 million to settle its obligations to creditors.
According to CEC’s Chief Financial Officer, Mutale Mukuka, the court-mandated arrangement stipulates that funds be distributed pro rata among creditors after covering administrative expenses and payments to Class 1 creditors.
However, despite KCM starting to pay other Class 2 creditors, CEC alleges it has been excluded.
Efforts to resolve the matter amicably have failed, with CEC’s Managing Director, Owen Silavwe, reporting that KCM management cited CEC’s pending appeal as the reason for withholding payment.
Mukuka states that CEC’s appeal, however, focuses solely on the payment terms of the outstanding balance and does not challenge the court’s ruling regarding the debt.
CEC argues that the High Court’s ruling remains enforceable as no stay has been issued.
The energy company contends that KCM’s refusal to comply with the court’s directive is baseless and has pleaded with the court to compel KCM to remit the first installment of the debt within five days.
In response, KCM has dismissed CEC’s claims, arguing that by appealing the CSA, CEC has breached its commitment under the court-approved scheme. KCM’s legal counsel, Glory Mwenya Chipota, cited a Deed of Waiver and Release, incorporated within the CSA, which prohibits creditors from initiating legal action against the mining firm.
KCM maintains that CEC’s appeal seeks preferential treatment, aiming to be classified separately from other Class 2 creditors.
The company also noted that the court did not specify a timeline for payments under the CSA, further justifying the delay.
According to KCM, payments to Class 2 creditors have not yet commenced due to ongoing validation processes, contrary to CEC’s claims.
