RAINBOW ACQUIRES SHAREHOLDING IN ZAM CHICK
Rainbow announced that it has reached agreement with Zambeef PLC (“Zambeef”) of Zambia, for the purchase of 49 per cent of Zambeef”s shareholding in Zam Chick Ltd. (“Zam Chick”) for USD14.25m in cash. Zam Chick currently manages and operates Zambeef”s chicken broiler business, including the broiler houses, chicken abattoir and processing plant.
Zambeef is a major player in the Zambian agri-business market. It has an established track record in operating in African markets with operations in Zambia, Ghana and Nigeria. This is an exciting opportunity for both Zambeef and Rainbow to work together in order to take the poultry industry in Zambia to a new level. Zambeef and Rainbow are each entitled to appoint 2 directors to the Zam Chick board of directors, with Zambeef continuing to manage the day to day operations of Zam Chick and Rainbow providing technical assistance.
The transaction is subject to the fulfilment or waiver, as the case may be, of inter alia the following conditions:
*Competition and Consumer Protection Commission of Zambia approval; and
*South African Reserve Bank approval.
The short term impact on earnings is not anticipated to be material. The transaction falls below the threshold for a category transaction for Rainbow in terms of the JSE Ltd. Listings Requirements.
The transaction will be funded from a portion of the proceeds from the rights offer as announced on SENS on 6 December 2012.