REG - Zambia (Republic of) - Launch of a Consent Solicitation
13/05/2024 16:30
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RNS Number : 2289O Zambia (Republic of) (MoF) 13 May 2024
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO, OR TO ANY PERSON
LOCATED OR RESIDENT IN, ANY JURISDICTION WHERE IT IS UNLAWFUL TO RELEASE,
PUBLISH OR DISTRIBUTE THIS ANNOUNCEMENT OR THE MEMORANDUM (AS DEFINED BELOW).
13 May 2024
the republic of zambia
launch of a consent solicitation in respect of outstanding notes
The Republic of Zambia, represented by the Ministry of Finance of Zambia (the
"Issuer" or "Zambia") is pleased to announce the launch of a consent
solicitation (the "Consent Solicitation") in respect of its:
· U.S.$750,000,000 5.375 per cent. Notes due 2022 (Regulation S ISIN:
XS0828779594, Common Code: 082877959; Rule 144A ISIN: US988895AA69, CUSIP:
988895AA6) (the "2022 Notes");
· U.S.$1,000,000,000 8.500 per cent. Notes due 2024 (Regulation S
ISIN: XS1056386714, Common Code: 105638671; Rule 144A ISIN: US988895AE81,
CUSIP: 988895AE8) (the "2024 Notes"); and
· U.S.$1,250,000,000 8.970 per cent. Notes due 2027 (Regulation S ISIN:
XS1267081575, Common Code: 126708157; Rule 144A ISIN: US988895AF56, Common
Code: 126844646, CUSIP: 988895AF5) (the "2027 Notes"),
in each case issued by the Issuer (each, a "Series" and, together, the
"Existing Notes").
Zambia is soliciting consents (the "Consent Solicitation") from the holders of
the outstanding Existing Notes (the "Noteholders") to consider and, if thought
fit, pass extraordinary resolutions (the "Extraordinary Resolutions") at
meetings of the Noteholders to be held on 4 June 2024 (the "Meetings") to
approve, inter alia, mandatorily exchanging the Existing Notes of that Series
for New Notes (the "Proposal"). The Consent Solicitation is made on the terms
and subject to the conditions set forth in the Consent Solicitation Memorandum
dated 13 May 2024 (the "Memorandum"), which is available to Noteholders from
the Consent Website: http://projects.morrowsodali.com/zambia
(http://projects.morrowsodali.com/zambia) , subject to eligibility
confirmation and registration, or by contacting the Morrow Sodali Limited (the
"Information and Tabulation Agent"), the contact details for which are set out
at the end of this announcement. Terms used in this announcement but not
defined herein have the respective meanings given to them in the Memorandum.
The notices convening the Meetings to be held at the offices of White &
Case LLP at 5 Old Broad Street, London EC2N 1DW at which the Extraordinary
Resolutions will be considered and, if thought fit, approved, have been
published on the date hereof in accordance with the relevant terms and
conditions of the Existing Notes.
Investor Call
Zambia intends to conduct a call with investors at 2:00 p.m. (London time) /
9:00 a.m. (New York City time) on 15 May 2024 at which Zambia will present the
terms of the Proposal. Noteholders who would like to attend the presentation
should request a link to register by emailing elora.fam@whitecase.com
(mailto:elora.fam@whitecase.com) . Proof of ownership of the Notes may be
requested. The deadline for registration is 1:00 p.m. (London time) / 8:00
a.m. (New York City time) on 15 May 2024.
Voting Deadline
In order to participate in the Consent Solicitation, Noteholders must submit
(or arrange to have submitted on their behalf Voting Instructions (as defined
in the Memorandum) by no later than 5:00 p.m. (New York City time) on 30 May
2024 (the "Voting Deadline") in accordance with the terms and the procedures
set out in the Memorandum.
Settlement Conditions
The implementation of the Extraordinary Resolutions and the other transactions
contemplated by the Consent Solicitation and the Proposal, including the
settlement of the Exchange (as defined below), are conditional upon
satisfaction (as determined by Zambia in accordance with the terms of the
Consent Solicitation and acting reasonably) of the following conditions (the
"Settlement Conditions"):
(a) there not having been instituted any action, investigation
or proceeding by or before any court or governmental, regulatory, arbitral or
administrative body which:
(1) makes or seeks to make illegal the Exchange pursuant to the
Proposal (other than by way of the implementation of, or changes to existing,
legislation);
(2) would or might result in a delay in, or restrict, the
ability of Zambia to issue or deliver the New Notes in exchange for Existing
Notes, or take any action required (in Zambia's sole discretion, acting
reasonably) in connection with the Extraordinary Resolutions; or
(3) imposes or seeks to impose limitations on the ability of
Zambia to issue or deliver the New Notes in exchange for Existing Notes or
take any action required (in Zambia's sole discretion, acting reasonably) in
connection with the Extraordinary Resolutions;
(b) all government and other approvals necessary for the
implementation of the Extraordinary Resolutions and the other transactions
contemplated by the Consent Solicitation and the Proposal, including the
settlement of the Exchange, having been obtained and being in full force and
effect;
(c) there not having been any change or development that, in
Zambia's sole discretion (acting reasonably), materially reduces the
anticipated benefits to Zambia of the Consent Solicitation, the Proposal or
the Exchange or that could be likely to prejudice materially the success of
the Consent Solicitation, the Proposal or the Exchange or that has had, or
could reasonably be expected to have, a material adverse effect on Zambia or
its economy;
(d) the Extraordinary Resolutions in respect of all Series of
Existing Notes being duly passed at the relevant Meetings (or at any adjourned
Meeting(s))
((a)-(d), together the "Conditions to Effectiveness");
(e) the aggregate principal amount of New Notes issued on the
Settlement Date in addition to the aggregate principal amount of New Notes to
be delivered by Zambia to any participating holder of Existing Notes in
relation to the Consent Solicitation not exceeding U.S.$40 million; and
(f) payment by Zambia on the Settlement Date of the Committee
Fees Payment and the Committee Fees Shortfall (each as defined in the
Memorandum) to Weil, Gotshal & Manges (London) LLP and Newstate Partners
LLP, respectively.
Zambia may, in its sole and absolute discretion, acting reasonably, waive any
of either paragraphs (a), (b) or (c) of the Settlement Conditions. Paragraphs
(d), (e) and (f) of the Settlement Conditions are not capable of being waived.
If the Extraordinary Resolutions in relation to one or more Series of Existing
Notes are not duly passed and if paragraphs (e) and (f) of the Settlement
Conditions are not complied with, the Settlement Conditions will not be
satisfied, the Proposal will not be implemented and the Exchange will not be
completed in respect of any Series of Existing Notes.
If the Settlement Conditions have been satisfied (or waived as the case may
be), then the transactions contemplated by the Consent Solicitation and the
Proposal will be binding on all Noteholders of each Series, whether or not
present at the relevant Meeting (or any adjourned Meeting), and each of them
shall be bound to give effect to it accordingly. Upon satisfaction of the
Conditions to Effectiveness and the Settlement Conditions Zambia shall give
notice to the Noteholders.
Consent Fee
Subject to the Settlement Conditions being satisfied or to the extent capable
of being waived (in the sole and absolute discretion of Zambia, acting
reasonably) waived, the Issuer (or its nominee) will pay the Consent Fee in
the amount of U.S.$15.00 per U.S.$1,000 in principal amount of Existing Notes
on the Settlement Date (as defined in the Memorandum) to each Noteholder who
has delivered a Voting Instruction voting in favour of the relevant
Extraordinary Resolution(s) on or prior to 5:00 p.m. (New York City time) on
24 May 2024 (the "Early Consent Deadline") and has not validly withdrawn or
revoked such Voting Instruction.
The Exchange
If all the Extraordinary Resolutions in respect of each Series of Existing
Notes are duly passed and implemented in accordance with their terms, the
entire outstanding principal amount of Existing Notes of U.S.$3,000,000,000
and Accrued Interest thereon will be mandatorily exchanged (the "Exchange")
for New Notes in the following aggregate principal amounts:
(i) 2022 Notes: The aggregate outstanding principal amount of
the 2022 Notes in the amount of U.S.$750,000,000 and Accrued Interest on the
2022 Notes in the amount of U.S.$142,325,521 will be exchanged for:
a. U.S.$389,924,112 in an aggregate principal amount of New A Notes; and
b. U.S.$309,645,618 in an aggregate principal amount of New B Notes.
(ii) 2024 Notes: The aggregate outstanding principal amount of
the 2024 Notes in the amount of U.S.$1,000,000,000 and Accrued Interest on the
2024 Notes in the amount of U.S.$336,930,556 will be exchanged for:
a. U.S.$584,205,480 in an aggregate principal amount of New A Notes; and
b. U.S.$463,927,881 in an aggregate principal amount of New B Notes.
(iii) 2027 Notes: The aggregate outstanding principal amount of
the 2027 Notes in the amount of U.S.$1,250,000,000 and Accrued Interest on the
2027 Notes in the amount of U.S.$411,125,000 will be exchanged for:
a. U.S.$725,870,408 in an aggregate principal amount of New A Notes; and
b. U.S.$576,426,501 in an aggregate principal amount of New B Notes,
together, the "Consideration". The Consideration will be delivered to the
Clearing Systems on the Settlement Date. The draft terms and conditions of the
New A Notes and the New B Notes are set out in the Memorandum.
A summary of the Existing Notes, indicative principal amounts of New Notes
that Eligible Holders may receive pursuant to the Proposal and the Exchange
and any Consent Fee that Noteholders that submit and do not revoke valid
Voting Instructions at or prior to the Early Consent Deadline may receive is
set out below.
Description of the Existing Notes ISIN Indicative New Notes Entitlement (per U.S.$1,000 in principal amount of Consent Fee (per U.S.$1,000 in principal amount of Existing Notes)
Existing Notes)
U.S.$750,000,000 5.375 per cent. Notes due 2022 XS0828779594 New A Notes in a principal amount of U.S.$519.90; and
(Regulation S)
New B Notes in a principal amount of U.S.$412.86.
U.S.$15.00
US988895AA69
(Rule 144A)
U.S.$1,000,000,000 8.500 per cent. Notes due 2024 XS1056386714 New A Notes in a principal amount of U.S.$584.21; and
(Regulation S)
New B Notes in a principal amount of U.S.$463.93.
US988895AE81
(Rule 144A)
U.S.$1,250,000,000 8.970 per cent. Notes due 2027 XS1267081575 New A Notes in a principal amount of U.S.$580.70; and
(Regulation S)
New B Notes in a principal amount of U.S.$461.14.
US988895AF56
(Rule 144A)
Settlement and Eligibility to Receive New Notes
In order to be able to receive the New Notes on the Settlement Date,
Noteholders must validly submit Settlement Instructions certifying such
Noteholder's status as an Eligible Holder, and must not have validly withdrawn
such Settlement Instructions, at or prior to the Voting Deadline. For further
information concerning Settlement Instructions please see "The Consent
Solicitation - Requirements for Settlement Instructions" in the Memorandum.
Noteholders that validly submit and do not validly withdraw Settlement
Instructions certifying such Noteholder's status as an Ineligible Holder at or
prior to the Voting Deadline will instead receive the Substitute Consideration
in accordance with the terms of the Cash Proceeds Arrangement described in the
Memorandum.
Noteholders that do not validly submit (or who subsequently validly withdraw)
Settlement Instructions at or prior to the Voting Deadline will be subject to
the Holding Period Arrangement described in the Memorandum.
Expected Timetable of Events
The times and dates below are indicative only. The timetable assumes that no
adjourned Meetings will be required to be convened in relation to the Consent
Solicitation for any Existing Notes. If any such meeting of holders of the
Existing Notes is adjourned, the notice, quorum and other requirements
applicable to an adjourned meeting in the terms of the relevant Existing Notes
will be complied with.
Events Times and Dates
Commencement of the Consent Solicitation 13 May 2024
DTC Record Date 22 May 2024
Early Consent Deadline 5:00 p.m. (New York City time) on 24 May 2024
Voting Deadline 5:00 p.m. (New York City time) on 30 May 2024
Meeting Date 4 June 2024 (The specific time and date of the Meeting relating to the
relevant Series of Existing Notes will be set out in the applicable Notice.)
Announcement of Results As soon as reasonably practicable after the final Meetings
Expected Settlement Date in respect of the Exchange and date on which the 11 June 2024
Consent Fee will be paid
The above times and dates are subject to the right of Zambia to extend,
re-open, amend and/or terminate the Consent Solicitation (as the case may be)
or modify the Settlement Date (subject to applicable law, the applicable
Agency Agreement and as provided in the Memorandum) with respect to the
Existing Notes.
Holders of the Existing Notes are advised to check with any bank, securities
broker or other intermediary through which they hold Existing Notes when such
intermediary would need to receive instructions from a Noteholder in order for
that Noteholder to be able to participate in the Consent Solicitation before
the deadlines set out above. The deadlines set by any such intermediary and
the Clearing System for the submission of Voting Instructions and Settlement
Instructions be earlier than the relevant deadlines above. See "The Consent
Solicitation-Voting and Quorum".
This announcement is released by The Republic of Zambia, represented by the
Ministry of Finance of Zambia, and contains information that qualified or may
have qualified as inside information for the purposes of Article 7 of
Regulation (EU) 596/2014 as it forms part of United Kingdom domestic law by
virtue of the European Union (Withdrawal) Act 2018, encompassing information
relating to the Consent Solicitation and the Proposal described above.
Any questions regarding the terms of the Consent Solicitation may be directed
to the Information and Tabulation Agent at the address and telephone number
specified below:
Morrow Sodali Limited
In London: In Stamford: In Hong Kong:
103 Wigmore Street
29/F, No. 28 Stanley Street,
333 Ludlow Street, 5th Floor
London W1U 1QS
Central, Hong Kong
South Tower, CT 06902
United Kingdom
United States of America
Telephone: +44 20 4513 6933 Telephone: +1 203 658 9457 Telephone: +852 2319 4130
Email: zambia@investor.morrowsodali.com
(mailto:zambia@investor.morrowsodali.com)
Consent Website: https://projects.morrowsodali.com/zambia
(https://bonds.morrowsodali.com/zambiaconsent)
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