Oct. 4 (Bloomberg) -- Zambia’s ZCCM Investment Holdings Plc said it will seek more than needed to repay debt from a share sale so the state-controlled company that has stakes in the nation’s mines can also invest in new developments.
The company, which has minority stakes in the local units of Glencore Xstrata Plc and Vedanta Resources Plc, plans to offer stock to existing shareholders and use the funds to cut the 2 billion kwacha ($379 million) it says it owes the government, Lusaka-based ZCCM-IH said in an e-mailed statement today. Zambia, Africa’s biggest copper producer, holds 87.6 percent of the company.
“This huge debt has suppressed the value of the company and made the company unattractive to investors and the market,” ZCCM-IH said.
A group of shareholders in August asked Zambia’s Securities and Exchange Commission to investigate the company. The minority owners claim they are discriminated against and that the government didn’t loan $300 million to ZCCM-IH. The loan was transferred to the company, and the Paris Club group of creditor nations canceled the debt in 2005, according to the shareholders.
ZCCM-IH will hold a general meeting by the end of December for shareholders to vote on going ahead with the plan to sell shares to existing investors, it said.
The Zambian government doesn’t plan to increase its shareholding through the deal, ZCCM-IH said. Minority owners hold stock mainly on the NYSE Euronext in Paris, according to the company.
Minority owners also want to be represented by a director on the board of ZCCM-IH before the stock sale proceeds.
The Securities and Exchange Commission didn’t respond to two e-mails seeking comment.
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