ZAMBEEF PRODUCTS PLC
(“The Company”)
[INCORPORATED IN THE REPUBLIC OF ZAMBIA]
COMPANY REGISTRATION NUMBER: 31824
SHARE CODE: ZAMBEEF
ISIN: ZM0000000201

Further to the Cautionary Announcements of 17 December 2010, 31 January 2011 and in compliance with the provisions of Section 39, Securities Act, Cap 354, 1993 and Clause 10 of The Securities (Takeover and Mergers) Rules and the Listing Requirements of the Lusaka Stock Exchange, shareholders and investors are advised that Zambeef wishes to inform its shareholders and the market that it has signed the Sale & Purchase Agreement with ETC Bio-Energy Limited to acquire Nampamba, Chambatata and Kampemba Farms together with related assets (herein referred to as “Targeted Assets”, where related assets include plant, equipment, machinery, vehicles, livestock, agricultural and other equipment, spares, parts and content of the stores at the various locations on the Farms including seed, fertiliser, chemicals, fuel, etc). The Competition and Consumer Protection Commission (“CCPC”) has granted Final Approval for the acquisition of the Targeted Assets.

Business

Zambeef Products PLC is a major agricultural business whose core activity is the production, processing, distribution and retailing of beef, chickens, pork, eggs, milk, dairy products, flour and bread, edible oil and stockfeed through its own retailing network throughout Zambia and West Africa. The group is one of the largest cropping operations in Africa with 5,000 hectares under irrigation of row crops. In addition, the group is a major producer of leather, shoes and industrial footwear for the local and international markets. The Group has also commenced roll-out of a palm plantation.

Zambeef Products PLC will acquire the Targeted Assets, which comprise of a total of 46,876.53 hectares in size together related assets (10,661 hectares is developed of which 3,000 hectares is under irrigation). It is anticipated that this acquisition will add significant value to the Company’s cropping operations.

Vendor

The Vendor is ETC Bio-Energy Limited, a company that is privately held focusing on farming operations in Zambia. ETC Bio-Energy Limited is a company incorporated in the Republic of Zambia (registered no. 12305), whose registered office is at Farm no. 4450/51, Ndola Rural, Copperbelt Province, PO Box 90599, Luanshya. In accordance with the Sale & Purchase Agreement, the Vendor has fully undertaken to sell the Targeted Assets to Zambeef. The Vendor has formally secured all necessary approvals for the disposal of the Targeted Assets.

The location of the Vendor’s key assets, i.e. the three farms that are part of the Targeted Assets as described above, include:

• Chambatata Farm: Ndola Rural in Copperbelt Province of Zambia;
• Kampemba Farm: Ndola in the Copperbelt Province of Zambia; and
• Nampamba Farm: Mpongwe in the Copperbelt Province of Zambia.

Commercial Justification

The primary motivation for the acquisition of the Targeted Assets is expansion of Zambeef’s cropping division. Zambeef is currently not self-sufficient in its internal requirements of wheat and soya. The wheat from the combined farms of Zambeef and those of the Targeted Assets will go to Zambeef’s wheat mill and bakery, to produce value-added wheat products such as flour and bread, which are retailed through Zambeef’s retail outlets throughout the country. The soya from the combined farming operations will go to Zambeef’s subsidiary, Zamanita Ltd. At Zamanita, the soya will be crushed to extract the crude soya oil, which is then refined into edible soya oil and sold through Zambeef’s retail outlets and third party wholesalers/retailers throughout the country. The by-product from the soya crushing is soya cake, which is the main protein ingredient for the stock-feed industry. Soya cake, together with the maize from the combined farming operations will go to Zambeef’s new stock-feed plant for further value-add to produce finished stock-feed.

Directors’ Views

The directors of Zambeef Products PLC have fully endorsed this acquisition with the view that this will expand the company’s current cropping operations. The acquisition will expand Zambeef’s product lines and this diversification will further enhance Zambeef’s quality of earnings and reduce earnings volatility. The acquisition is aligned with Zambeef Products PLC core business that is production, processing, distribution and retailing the Zambian food basket to all segments of the population.

Consideration

The purchase consideration for the “Targeted Assets” is US$47,390,000 (Forty-Seven Million, Three Hundred and Ninety Thousand United States dollars).

Shareholder Approval

The Company will notify the Zambeef shareholders on the date and venue for an extraordinary general meeting during which the shareholders will be requested to grant final approval for the acquisition and consideration for the Targeted Assets.

Withdrawal of Cautionary Announcement

Shareholders and the investing public are dually advised that the caution is no longer required when dealing in Zambeef securities.

Risk Warning

Accordingly, investors in Zambeef Products PLC are advised to exercise caution when trading in the Company’s shares and should seek the professional advice of a broker or investment advisor for guidance.

Dated: 8 February 2011

Sponsoring Broker

Pangaea Renaissance Securities Limited

(Member of the Lusaka Stock Exchange)

(Regulated by the Securities and Exchange Commission)

First Issued on: 17 December 2010

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