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Amendments to the terms and conditions of the IAMA and withdrawal of cautionary announcement
ZCI Limited
(Bermudian registration number 661:1969)
(South African registration number 1970/000023/10)
JSE Share code: ZCI
ISIN Code: BMG9887P1068
Euronext share code: BMG9887P1068
("ZCI" or "the Company")
Amendments to the terms and conditions of the IAMA and withdrawal of cautionary
announcement
1 Introduction
ZCI shareholders (“Shareholders”) are referred to the Annual Report that was distributed to
Shareholders on Friday, 28 June 2013 and to the announcement published on the Stock Exchange
News Service (“SENS”) of the JSE Limited (“JSE”) on Monday, 12 August 2013 (“Announcement”),
which included details of the proposed variations to the terms and conditions (“Amendments”) of the
Investment Advisory and Management Agreement (“IAMA”) entered into between ZCI and iCapital
(Mauritius) Limited (“iCapital”) in order to settle a dispute between ZCI and iCapital as to the
calculation and payment of the performance fee, if any (“Performance Fee Dispute”), for two 24-
month periods, the first from 1 January 2009 to 31 December 2010 (“First Period”) and the second
from 1 January 2011 and would have ended on 31 December 2012 (“Second Period”), had ZCI not
given iCapital six months written notice of the termination of the IAMA on 20 July 2011, following
which the IAMA terminated on 31 January 2012.
The Amendments are constituted by a number of agreements and settlement deeds including, inter
alia, the escrow agreement entered into between ZCI, iCapital and Norton Rose Fulbright LLP on 24
May 2013 (“Escrow Agreement”), which prescribes the escrow arrangements for the settlement of
the disputes that have arisen between ZCI and iCapital including the Performance Fee Dispute and
the share transfer deed signed by ZCI and iCapital and held in escrow, relating to the settlement of
the Performance Fee Dispute (“Share Transfer Deed”). The Share Transfer Deed provides for the
following:
• an initial payment of US$2 million in settlement of the Performance Fee Dispute for the First
Period (“Initial Payment”); and
• the transfer to iCapital of 247 575 741 African Copper PLC (“ACU”) ordinary shares (“ACU
Shares”) held by ZCI (“Transfer Shares”) in settlement of the Performance Fee Dispute relating to
the Second Period (“Transfer”). The Transfer Shares constitute 18.5% of ACU Shares held by
ZCI and 16.67% of the total issued share capital of ACU subsequent to the conversion by ZCI of
the loan of US$8 379 100 from ZCI to ACU into 556 307 263 ACU Shares (“Loan Conversion”), in
accordance with the terms of the relevant loan agreement.
The Amendments constitute a related party transaction in terms of section 10 of the JSE Listings
Requirements so they require the approval of Shareholders. A circular setting out details of the
Amendments, the text of the fairness opinion obtained from Venmyn Deloitte (Pty) Ltd in respect of
the Amendments and, including a notice of general meeting (“General Meeting”) which contains
ordinary resolutions to approve the Amendments (“ZCI Circular”), will be posted to Shareholders on
Wednesday, 11 September 2013. Mr J Soko, the related party to ZCI, and his associates do not hold
any ZCI ordinary shares (“ZCI Shares”).
2 Conditions precedent
ZCI’s release from all and any claims arising from the Performance Fee Dispute in relation to the
First and Second Periods is conditional on the following:
• the approval by Shareholders, in general meeting, of the Share Transfer Deed; and
• the Share Transfer Deed being unconditionally and irrevocably released from escrow in
accordance with the terms of the Escrow Agreement.
3 Pro forma financial effects
The table below sets out the summary pro forma financial effects of the Amendments, on ZCI’s basic
earnings, headline earnings, diluted earnings, diluted headline earnings, net asset value and net
tangible asset value per ZCI Share.
The summary pro forma financial effects have been prepared to illustrate the impact of the
Amendments on the audited, published financial information of ZCI for the year ended 31 March
2013, had the Amendments occurred on 1 April 2012 for the purpose of the statement of
comprehensive income and on 31 March 2013 for the purpose of the statement of financial position.
The summary pro forma financial effects have been prepared using accounting policies that comply
with International Financial Reporting Standards and that are consistent with those applied in the
audited, published financial information of ZCI for the year ended 31 March 2013.
The summary pro forma financial effects set out below are the responsibility of the directors of ZCI
and have been prepared for illustrative purposes only and because of their nature may not fairly
present the financial position, changes in equity, and results of operations or cash flows of ZCI after
the Amendments.
Before the After the Percentage
Amendments 1 Amendments 2 change 5
Actual Pro forma
Basic earnings/(loss) per ZCI Share
(US$ cents) 5.16 (4.19) (181.2)
Diluted earnings/(loss) per ZCI Share
(US$ cents) 1.63 (5.53) (439.3)
Headline earnings/(loss) per ZCI Share
(US$ cents) 7.42 (2.32) (131.3)
Diluted headline earnings/(loss) per ZCI
Share
(US$ cents) 3.89 (3.66) (194.1)
Net asset value (US$ cents) 152.60 158.49 3.9
Net tangible asset value (US$ cents) 81.04 86.93 7.3
Number of ZCI Shares in issue 55,677,643 55,677,643 0.0
Weighted average and diluted number of
ZCI Shares in issue 55,677,643 55,677,643 0.0
Notes
1. The “Before the Amendments” basic earnings/(loss), diluted earnings/(loss), headline
earnings/(loss) and diluted headline earnings/(loss) per ZCI Share have been extracted
without adjustment from the audited, published results of ZCI for the year ended 31 March
2013. The “Before the Amendments” net asset value and net tangible asset value per ZCI
Share have been calculated from the financial information presented in the audited, published
results of ZCI for the year ended 31 March 2013.
2. The financial information included in the "After the Amendments" column has been prepared
based on ZCI’s audited, published financial results for the year ended 31 March 2013, taking
into account the following:
- the Loan Conversion resulting in ZCI holding an additional 556 307 263 new ACU Shares;
- the settlement of the Initial Payment of US$2 million to iCapital;
- the Transfer which has been recognised as a share based payment and calculated in
accordance with IFRS 2 Share-based Payments and IAS 27 Consolidated and Separate
Financial Statements (“Standards”). The Transfer has been measured at the fair value
(based on the ACU Share price in accordance with the Standards) of the equity instruments
granted and calculated as 247 575 741 ACU Shares, granted at the quoted share price of
ACU Shares on the London Stock Exchange of GBp1.63 on the assumed grant date, being
31 March 2013, and converted to US Dollars based on an exchange rate of US$1.52 for
each GBP1.00 on the same date;
- the assumed once-off costs directly relating to the Amendments, amounting to
US$130 000, have been expensed in accordance with IFRS; and
- the increase in the non-controlling interest as a result of the decrease in ZCI’s shareholding
in ACU in terms of the Transfer has been recognised.
3. There are no post balance sheet events which require adjustment of the pro forma financial
effects.
4. All adjustments, with the exception of costs directly attributable to the Amendments of
US$130 000, are expected to have a continuing effect on the financial results of ZCI.
5. The percentage change is measured as the difference between the “After the Amendments”
column and the “Before the Amendments” column as a percentage of the “Before the
Amendments” column.
4 Salient dates and times
2013
Record date to be entitled to receive notice of the General Meeting Friday, 30 August
ZCI Circular posted to Shareholders on Wednesday, 11
September
Last day to trade ZCI Shares in order to be eligible to participate and
Friday, 13 September
vote at the General Meeting
Record date to be entitled to participate in and vote at the General
Friday, 20 September
Meeting
Forms of proxy for the General Meeting must be received by 15:00 CET
Monday, 23 September
(14:00 BST, 15:00 SAST) on
General Meeting to be held at 15:00 CET (14:00 BST, 15:00 SAST) on Thursday, 26
September
Results of the General Meeting released on SENS on Thursday, 26
September
Results of the General Meeting published in the press on Friday, 27 September
Notes
1. All dates and times referred to in this announcement are Central European (GMT+1) times.
2. These dates and times are subject to amendment. Any such amendment will be released on
SENS.
3. Copies of the ZCI Circular may be obtained in English only on the Company’s website
(www.zci.lu) and at the Company’s registered office and KPMG Services (Pty) Ltd’s offices,
during normal business hours, from Wednesday, 11 September 2013 until Thursday, 26
September 2013.
5 Withdrawal of cautionary
Shareholders are advised that caution is no longer required to be exercised when dealing in their ZCI
Shares.
Bermuda
22 August 2013
Transaction Sponsor Sponsor
KPMG Services (Pty) Ltd Bridge Capital Advisors (Pty) Ltd
Independent expert International legal advisor
Venmyn Deloitte (Pty) Ltd Maitland Advisory LLP
Reporting accountants and auditors
KPMG Inc.
Date: 22/08/2013 04:44:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
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