Anglo African Ag PLC Corporate update
15 December 2021 - 6:00PM
UK Regulatory
TIDMAAAP
The information contained within this announcement is deemed to constitute
inside information pursuant to the EU (Withdrawal) Act and amended pursuant to
Market Abuse (Amended) (EU Exit) Regulations 2019. Upon the publication of this
announcement, this inside information is now considered to be in the public
domain.
For immediate release
15 December 2021
Anglo African Agriculture plc
("AAA" or the "Company")
Corporate Update - Restructuring and future opportunities
The Company is pleased to provide a progress update since the proposed
acquisition of the Comarco group of companies was terminated (the "Failed
Comarco Transaction") and the loan repaid. This has required a considerable
restructuring of the Company in collaboration with stakeholders, including
creditors, holders of Convertible Loan Notes ("CLNs") and holders of options
and warrants.
Creditors
As a consequence of the Failed Comarco Transaction, the Company incurred
considerable liabilities, principally as a result of fees incurred with
professional advisers. The Board is pleased to announce that it has reached a
settlement with all of the creditors who provided services in connection with
the Failed Comarco Transaction. This settlement has reduced our creditor
position by about 50% and has left the group with a cash position of
approximately £550,000. As part of the settlement, the AAA board has decided
that, subject to shareholder approval, a certain proportion of amounts owing to
one creditor will be converted into equity in AAA as outlined further below.
Convertible Loan Notes
All of the holders of CLNs amounting to £853,000 in principal, together with
accrued interest of £106,919 (as at 31 October 2021), have agreed to new terms
such that the repayment date will be extended to 30 September 2023 with a
conversion price being the lower of a) 5p or b) a 10% discount to the 30 day
VWAP ahead of conversion. The interest rate on the CLNs will remain unchanged
at 12%.
Option and Warrant Holders
Holders of warrants arising from 2018 and 2020 equity fundraises have had their
warrants reset to expire on 1 February 2024 and to be exercisable at 5p.
The options and warrants are now as follows:
Warrants: 138,067 at 20p with expiry date 05/09/2022
8,050,000 at 5p with expiry date 01/
02/2024
2,566,889 at 5p with expiry date 01/
02/2024
Options: 597,809 options at 20p with expiry date 05
/09/2022
300,000 options at 11p with expiry
date 05/09/2022
Dynamic Intertrade
The group is now left with its food product manufacturing and trading business,
Dynamic Intertrade ("DI"), which is currently trading in a tough environment,
but remains competitive in the market. It has just received two tenders from
their largest clients for an additional twelve and six months and is increasing
its sales force. The twelve month contract is subject to review after 6 months
however DI is confident it will retain the business. Dynamic Intertrade
continues trading below its pre-pandemic levels however it is improving margins
and ensuring costs are kept in check.
Directors' interests
Following the restructuring, the table below summarises the interests of the
Directors in the share capital of the Company:
Ordinary Percentage Warrants Options at Options at CLNs
shares of Total at 5p 20p 11p (maturing on
Voting (expiring (expiring (expiring 30 September
Rights 01/02/24) at 05/09/ at 05/09/ 2023)
22) 22)
Andrew Monk* 1,106,338 5.0% 500,000 91,952 100,000
Robert Scott** 213,231 1.0% 128,578 50,000 £41,000
Matthew Bonner 165,891 0.8% 128,578 180,000 £42,000
* Andrew Monk's entire shareholding is held within his SIPP (Fitel Nominees
Limited) and Hargreaves Hale Limited
** Robert Scott's warrants are held through Carimar International Limited
In addition, in part payment of sums owed by the Company to VSA Capital Limited
("VSA Capital"), the Financial Adviser and Broker to AAA, AAA board has
proposed to issue, subject to shareholder approval, 3,823,627 new ordinary
shares ("New Ordinary Shares") to VSA Capital. Andrew Monk is Chief Executive
and substantial shareholder of VSA Capital Group plc, the holding company of
VSA Capital. Following the issue of the New Ordinary Shares to VSA Capital, the
interests of VSA Capital in the share capital of the Company would be as
follows:
Ordinary shares New Ordinary Shares Total
Percentage
VSA Capital 122,233 3,823,627
3,945,860 15.3%
In addition, VSA Capital holds 191,266 warrants and CLNs amounting to £
212,000. In addition, Andrew Raca, director of VSA Capital, holds 91,952
options in AAA at exercise price of 20p expiring on 5 September 2022.
General Meeting
A general meeting of the company will be held to, amongst other matters,
propose resolutions to authorise the Company to issue the New Ordinary Shares.
A circular will be issued to shareholders in due course.
The New Ordinary Shares will rank pari passu with the existing ordinary shares.
Once the Company has issued the New Ordinary Shares, subject to shareholder
authority, the Company will make application for admission of the New Ordinary
Shares to the Official List and to trading on the main market (standard
segment) of the London Stock Exchange.
Future Direction
Since the termination of the Comarco transaction numerous groups have
approached the Board with opportunities of various sorts. The Board is
currently evaluating these and hopes to make a fairly rapid decision. The key
determinant will be which opportunity can give the best return to shareholders
in a relatively short period of time. The Board believes some of the proposals
would be of significant value to shareholders, but all are still at an early
stage.
Andrew Monk commenting,
"When I was re-appointed Chairman at the end of July I envisaged a short
appointment to either close the Comarco Transaction which had gone on too long
or to abort it and find a new direction for the Company. A decision had to be
made as the whole transaction had taken too long and also the port was rapidly
losing money which meant the original terms would have been unattractive to
AAA. We had hoped to find a resolution that worked for both parties and it was,
somewhat bizarrely, disappointing to simply find our loan returned and about
$1.5mn in our bank account without any paperwork and no full and final
settlement agreement, but this behaviour by the vendors also perhaps explains
why this deal was struggling.
I still do not intend to be Chairman for long and am hopeful that we can
quickly close a deal where everyone can benefit from a healthier share price."
For further information, please visit www.aaaplc.com or contact the following:
Anglo African Agriculture plc
Andrew Monk, Non-Executive Chairman +44 (0)20 3005 5000
Rob Scott, Executive Director +27 (0)84 6006 001
VSA Capital Limited (Financial Adviser and +44 (0)20 3005 5000
Corporate Broker)
Andrew Raca, Maciek Szymanski (Corporate Finance)
END
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