The information contained within this
announcement is deemed to constitute inside information as
stipulated under the Market Abuse Regulations (EU) No. 596/2014.
Upon the publication of this announcement, this inside information
is now considered to be in the public domain.
9 July 2019
Anglo African
Agriculture plc
(“AAA” or the
“Company”)
Comarco Group
receives consent to designate Mombasa facility as a Private
Port
As announced on 10th June
2019, AAA has signed conditional share purchase agreements
to acquire the entire share capital of a number of companies within
the Comarco group of companies that are based in Kenya and engaged in the port and marine
logistics business (the “Proposed Acquisition”).
Whilst the Proposed Acquisition remains subject to a number of
conditions, AAA intends to continue to inform shareholders and
investors of developments in the Comarco Group.
The Proposed Acquisition, if completed, would result in current
AAA shareholders having a minority interest (expected to be less
than 5%) in the Enlarged Group and would constitute a Reverse
Takeover ("RTO") under the Listing Rules. AAA and Comarco
Group are continuing to work towards the successful completion of
the RTO and a Share Registration Document is in the process of
being prepared.
AAA is pleased to announce a significant development concerning
the Comarco Port and in relation to current trading within
Comarco.
Private Port Facility
Comarco Group has obtained the consent of the Kenya Revenue
Authority to gazette its Mombasa port area as an entry and export
area for customs purposes by the Commissioner of Customs and
Border. This will open up considerable business opportunities
for the Comarco Group in future.
Historically, three of the companies within Comarco Group were
registered as EPZ (Export Processing Zone) companies within the
Kenyan EPZA programme (https://epzakenya.com), namely:
Comarco Properties (EPZ) Limited (CPL), Kenya Marine Contractors
(EPZ) Limited (KMC) and Comarco Supply Base (EPZ) Limited (CSB).
The principal attractions of the EPZ programme are that all imports
are duty free, VAT exempt, and are eligible for a corporate tax
holiday of 10 years, thereafter, reducing to 25%.
CPL and KMC converted to EPZ companies in 2003. The principal
reasons for doing so were as follows:
-
The majority of the work being undertaken by Comarco Group was
outside of Kenya;
-
Repairs and maintenance to Comarco Group’s vessels and equipment
were classed as export services and attracted tax relief through
the EPZ programme; and
-
The duty free importation of equipment such as cranes, trucks,
front end loaders was made considerably easier and facilitated
Comarco Group’s operational ability and asset base.
In recent times, it became apparent that keeping CPL within the
EPZ programme, in isolation, would be a hindrance to the Group’s
strategy as opportunities for the Port would be limited to exports
only. In recent consultation with the Kenya Port Authority and the
Kenya Revenue Authority, Comarco Group was advised to apply for the
gazettement of the Port area as an entry and export area for
customs purposes together with the operation of a sufferance wharf
as this would enable Comarco Group to import cargo through the Port
as well as to export cargo. KMC and CSB will remain within the EPZ
programme but will operate from a different location.
Comarco Group has obtained the consent of the Kenya Revenue
Authority to gazette its Mombasa port area as an entry and
export area for customs purposes by the Commissioner of
Customs and Border. This means that:
-
The Comarco Port has been designated as a Kenyan Entry &
Exit Point;
-
The Comarco jetty has been designated a sufferance wharf
and customs area; and
-
The Port has been designated as a customs bonded
warehouse.
These permissions enable Comarco Group to operate as an
independent port facility, which will allow the Group to
consolidate and expand its port operations to a significantly
wider user base.
As a consequence of the above, Comarco Group has signed a
contract with Samruddha Kenya Limited for the export of
500,000mt of iron ore in bulk over a
one year period.
In addition, Comarco Group has finalised a contract with RK
Sanghani Limited for the export of 200,000mt of iron ore in bulk over a six month
period.
Comarco Group expects that the gazettement will facilitate
negotiation and completion of other similar scale long term
contracts in the future.
Comarco Group
Comarco Group owns a port and a vessel fleet located in a key
strategic position for servicing East African, on and offshore,
shipping and on shore demands. Kenya and in particular Mombasa is the key
strategic hub for Eastern and Central
Africa and the Comarco port is ideally positioned as a full
service, deep water, functioning port for developments in the oil
and gas sector in Mozambique.
Comarco Group strategy is to expand the current port facilities as
a gazetted “Private Port” and to retain and further develop the EPZ
companies to take advantage of opportunities identified in the
region.
Anadarko has recently announced the Final Investment Decision
(FID) in the “Area 1” of the Rovuma Basin in Mozambique, at $20
billion the FID is the largest Oil and Gas sanction ever
made in Sub Saharan Africa. Comarco Group is one of the few marine
operators in the region with the capacity and experience to take
part in such large scale and specialised oil and gas marine
projects and as such it is anticipated that Comarco Group will be
competitive in the bidding for ongoing and upcoming tenders.
There will be opportunities for significant improvements in the
accessibility of financing of Comarco Group once the Proposed
Acquisition as detailed in the 10 June announcement is
completed.
Over the last year there has been major restructuring of the
Comarco Group as part of the partnership with AAA. The existing
management team has been bolstered by the arrival of new senior
personnel with a renewed focus on developing business opportunities
at the Port in Kenya and within
the region.
Simon Phillips, Chief Executive
of Comarco Group commented:
“This is a game changer for Comarco. Historically we have
enjoyed a lot of benefits from the EPZ programme and it has served
the group, and Kenya, well. We
will continue our good working relationship with the EPZA by
keeping KMC and CSB in the programme. The designation of the
Comarco Port as a functional private port broadens our capabilities
and opens up a raft of new opportunities. We are already
seeing these benefits come through with the signing of two
significant contracts.”
The information communicated in this announcement is inside
information for the purposes of Article 7 of Regulation 596/2014
(“MAR”). The Company will continue to update the market as and when
appropriate.
For further information, please visit
www.aaaplc.com or www.comarcogroup.com or
contact the following:
Comarco
Group
Simon Phillips (Chief Executive)
Charlie Pettifer |
+254 722 4104 04 |
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VSA Capital Limited
(Financial Adviser and Corporate Broker) |
+44 (0)20 3005 5000 |
Andrew
Monk (Corporate Broking)
Andrew Raca (Corporate Finance) |
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