ZAFFICO Secures Strategic Financing and Expands Plantation Portfolio with WCFCB

Zambia Forestry and Forest Industries Corporation Plc (ZAFFICO) has announced significant progress in its strategic financing initiatives following a cautionary update on 25 July 2025. The company has concluded two major agreements with the Workers Compensation Fund Control Board (WCFCB), aimed at financing value-addition projects and expanding its plantation portfolio.

The first agreement is a USD 4.5 million debt facility to fund the establishment of a particle board plant, sawmill, and related operational activities. The facility will be disbursed in three tranches: USD 500,000 within 30 days of 3 November 2025, USD 500,000 by 31 December 2025, and the remaining USD 3.5 million by 31 March 2026. Interest on the facility is set at 15% per annum (simple interest), with a nine-month moratorium on interest payments. 

The loan will be secured by a floating charge over ZAFFICO’s Lamba Plantation. The lender, WCFCB, may also convert all or part of the outstanding loan into ZAFFICO shares via a rights issue, subject to regulatory and shareholder approvals.

The second agreement involves the purchase of the Kawambwa Exotic Forest Plantation in Luena Farming Block, Kawambwa District, including all infrastructure and biological assets (pine and eucalyptus plantations). The purchase price is ZMW 10,245,400, payable in full on execution of the agreement. Completion is set within 14 business days of receiving the Property Transfer Tax Clearance from WCFCB, which is responsible for all statutory fees prior to the sale.

WCFCB, a statutory body established under the Workers’ Compensation Act to manage the national compensation fund, is also a 7% shareholder in ZAFFICO. Its investment policy prioritises projects that support national development, create employment opportunities, and generate secure returns.

Together, the two transactions total ZMW 298,858,765, representing approximately 22% of ZAFFICO’s market capitalisation of ZMW 1,376,000,000 as at 7 October 2025. Consequently, they are classified as a Category 2 transaction under the Lusaka Securities Exchange Listing Requirements.

Pro forma projections indicate a positive impact on earnings and net asset value per share:

Management emphasised that these transactions align with ZAFFICO’s strategic agenda focusing on plantation expansion, value addition, and operational efficiency, aiming to restore financial stability and transform the company into a vertically integrated enterprise.

Shareholders and investors are advised to exercise caution when dealing in the company’s securities, as further announcements regarding strategic financing are expected.