Zambia Consolidated Copper Mines Ltd. Power Division distribution

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The Copperbelt Energy Consortium, comprising of Cinergy Corp (formerly known as Midlands Power International, a subsidiary of GPU International) and National Grid Plc., and 5 senior managers from the Zambia Consolidate Copper Mines Ltd. (ZCCM), purchased an 80% holding in ZCCM's power division. The ZCCM Power Division was originally responsible for the operation of 700km of transmission lines at 220-kV and 66-kV with over 30 substations and distribution activities to the Zambian copper belt. The total divestiture revenue from the transaction, which was completed on December 12, 1997, was $181.5 million. This includes $134.0 million in debt assumed, $50.0 million in immediate cash, and $7.5 million in deferred cash to be paid in year 4. The deferred cash is contingent upon the Konkola Deep Mining Project (KDMP) entering into a long-term power-purchase-agreement with the consortium. The Copperbelt Energy Consortium agreed to invest an estimated $92.45 million, of which $7.25 million is in equity/quasi-equity capital, a committed capital investment of $25.2 million over the first five years of operation, and $60 million in contingent capital investment during the fifteen years of operation. A loan of US$ 10 million was provided by the Southern Africa Development Bank in 1999 to finance the Chambishi Transmission. Following acquisition, the CEC has invested $15.4 million in capital improvements and expansion of the system. Konkola Copper Mines plc was formed in early April to take over the remaining unprivatized assets of Zambia Consolidated Copper Mines Ltd. (ZCCM). Konkola Copper Mines is 65%-owned by Zambia Consolidated Investments, a subsidiary of London-based Anglo American plc; 20% by ZCCM, which is now organized as a holding company with no operating responsibility; 7.5% by the International Finance Corp.; and 7.5% by Commonwealth Development Corp. Konkola Copper Mines is contractually committed to capital expenditures of at least $208M over the next three years. http://e-mj.com/magazinearticle.asp?magazinearticleid=37830&magazineid=116&siteID=21&releaseid=3952&mode=print None