Zambeef Rises by Record as U.K.’s CDC to Invest $65 Millionby
Zambian agricultural company jumps 58% on London’s AIM market
Will use some proceeds to gain control of chicken business
Zambeef Products, the Zambian agricultural company, rose the most on record in London after announcing a $65 million investment by the U.K.’s Commonwealth Development Corp.
The company’s stock jumped 39 percent on the Alternative Investment Market to 11.125 pence, having climbed as much as 58 percent earlier in the day, giving it a market value of 27.6 million pounds ($36.3 million). Seventeen times the three-month daily average volume of stock was traded by 3:39 p.m.
CDC will invest $65 million in Zambeef, including $9.5 million in stock and $55.5 million to purchase 100 million convertible redeemable preference shares, that will give it a 17.5 percent stake, the Lusaka-based company said Thursday in an e-mailed statement.
Zambeef will use $23 million of the funds to buy full ownership in its Zambian chicken joint-venture with RCL Foods Ltd. of South Africa, and to refinance debt, it said. RCL had earlier this year said it opted to exercise an option to sell its stake in the chicken company back to Zambeef for either cash or shares in the parent company. RCL rose as much as 7 percent in Johannesburg, the most in six months on a closing basis, and was little changed by 4:44 p.m. in the South African city.
“This is a significant step forward for our company and we are now in a stronger position than ever,” Zambeef Chairman Jacob Mwanza said in the statement.