TIDMAFPO
RNS Number : 6308I
African Potash Ltd
01 September 2016
African Potash Limited / Index: AIM / Epic: AFPO / Sector:
Mining
1 September 2016
African Potash Limited ('African Potash' or 'the Company')
Subscription and Amendment of Bridge Loan Agreement
African Potash, the AIM listed company focused on the vertical
integration of fertiliser operations in Africa and Sub-Saharan
potash assets, is pleased to announce a subscription to raise
GBP500,000 before expenses (the 'Subscription') and amendments to
the terms of its existing unsecured bridge loan agreement as
announced on 2 December 2015 (the 'Bridge Loan').
Details of the Subscription, issue of equity and total voting
rights
Pursuant to the Subscription, the Company will issue 235,294,118
new ordinary shares of no par value (the 'Subscription Shares') to
raise GBP500,000 (before expenses) at a price of 0.2125 pence per
new ordinary share (the 'Issue Price').
In addition, an over-allotment option has been granted by the
Company in respect of 70,588,235 new ordinary shares in the Company
(the 'Over-allotment Shares') at the Issue Price, exercisable at
any time on or before 5.00 p.m. London time on 24 November
2016.
The proceeds from the Subscription will be used for working
capital purposes and to further support and develop the Company's
fertilizer trading business.
In addition, the Company has agreed to issue up to a further
17,908,235 new ordinary shares of no par value (the "AMS Shares")
to African Management Services Limited ("AMS"), in order to settle
an outstanding historic liability in respect of the provision of
administrative and support services provided to the Company; AMS
have agreed not to deal in the AMS shares for a period of
90-days.
Application has been made for the admission of the Subscription
Shares and the AMS Shares to trading on AIM and dealings are
expected to commence on or around 6 September 2016 ('Admission').
The Subscription Shares will rank pari passu with the existing
ordinary shares.
Following Admission of the Subscription Shares and the AMS
Shares, in accordance with the Financial Conduct Authority's
Disclosure and Transparency Rules, the Company will have
1,078,465,711 ordinary shares of no par value in issue each with
voting rights. The Company does not hold any shares in treasury.
The above figure of 1,078,465,711 may be used by shareholders as
the denominator for the calculations by which they will determine
if they are required to notify their interest in, or a change to
their interest in, the share capital of the Company under the
Financial Conduct Authority's Disclosure and Transparency
Rules.
Amendment to terms of the Bridge Loan
As noted above, the Company has also entered into an agreement
to amend the terms of the Bridge Loan (the "Loan Amendment") which
was notified on 2 December 2015. It is noted that the Bridge Loan
would have been repayable in full on 1 September 2016 in the
absence of agreement of the lender to revised terms. The material
terms of the Loan Amendment are as follows (all other material
provisions of the Bridge Loan remain in force, un-amended):
-- The repayment terms of the Bridge Loan shall be amended so
that the Bridge Loan is repayable in full on the earlier of:
(i) 1 September 2017;
(ii) completion by the Company of equity financings after the
Subscription which (in aggregate) raise more than GBP1.5m; and
(iii) completion of any non-trade finance debt financing.
-- In addition to its existing rights under the Bridge Loan the
lender shall have a right at any time to convert either the entire
amount of the Loan outstanding (including accrued interest) or any
amount of the Loan outstanding in multiples of US$50,000 at:
(i) a price per share equal to the price at which shares are
issued in connection with the Subscription; or
(ii) if lower, a price per share equal to the price at which any
shares are issued for cash following completion of the
Subscription.
-- It is acknowledged that Company may not have sufficient share
authority to enable it to comply with its obligation on conversion,
and accordingly the Company undertakes to pass such necessary
resolutions at the next shareholders meeting which is expected to
be held no later than 1 February 2017. To the extent that the
Company has any remaining authority to allot and issue shares
following the Subscription, the Company has agreed not to utilise
any portion of the remaining authority for any purpose other than
to allow conversion of the Bridge Loan or otherwise under the terms
of Bridge Loan (as amended).
-- In consideration for accepting these amendments, the lender
will receive an "amendment fee" of 5% of the total outstanding
facility amount, which will be paid in cash from the proceeds of
the Subscription.
The amendment to Bridge Loan is deemed to be a related party
transaction pursuant to AIM Rule 13. The Independent Directors of
the Company, having consulted with Cantor Fitzgerald Europe, its
nominated adviser, consider that the terms of the Bridge Loan are
fair and reasonable in so far as its shareholders are
concerned.
African Potash Executive Chairman Chris Cleverly said: "It is
hoped that the funds raised at this time and the accommodation
provided by the amendment to the existing bridge loan will provide
the Company with a solid platform from which to further grow our
ambitious fertiliser trading programme. Shareholders will be aware,
from our recent announcements, of the traction which we are gaining
in the market and we are confident that this funding will assist in
revenue generation. We are progressing with these initiatives and
have others in the pipeline and will update the market accordingly
as we progress."
* * ENDS * *
For further information visit www.africanpotash.com or contact
the following:
+44 (0) 20 7236
Chris Cleverly African Potash Limited 1177
Cantor Fitzgerald +44 (0) 20 7894
David Porter Europe 7000
+44 (0) 20 7710
Colin Rowbury Cornhill Capital Limited 9610
St Brides Partners +44 (0) 20 7236
Susie Geliher Ltd 1177
About African Potash
African Potash is an AIM quoted company focussed on building a
vertically integrated platform for the mining, production and
distribution of fertiliser, primarily within Africa.
The Company has a trading agreement with the Common Market for
Eastern and Southern Africa ('COMESA'), a free trade union for
twenty African member states, to supply and deliver fertiliser to
off-takers identified and introduced by COMESA.
The Company also operates the Lac Dinga Project in the Republic
of Congo, which is prospective for potash.
Market Abuse Regulations (EU) No. 596/2014
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). Upon the
publication of this announcement via Regulatory Information Service
("RIS"), this inside information is now considered to be in the
public domain.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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