China Food Company PLC Issue of Loan Notes and Company Update (1653V)
24 October 2014 - 5:00PM
UK Regulatory
TIDMCFC
RNS Number : 1653V
China Food Company PLC
24 October 2014
Press Release 24 October 2014
China Food Company Plc
("China Food", the "Group" or the "Company")
Issue of Loan Notes and Company Update
China Food Company Plc (AIM: CFC), a leading Chinese
manufacturer of cooking and dipping sauces, today announces that it
has issued 39 will issue up to a further 61 Convertible Loan Notes
of GBP1,000 each ("Loan Notes") in lieu of payment for professional
services.
The Loan Notes issued are A Loan Notes and all Loan Notes may be
converted into ordinary shares at any time up to maturity at a
price of 15.5 pence at the option of the Loan Note Holder. Details
of the terms of the Loan Notes were announced on 6 September 2013
and following the issue of 39 Loan Notes there are Loan Notes
totaling GBP5.7m in aggregate.
As announced on 11 July 2014, the Loan Notes are technically in
default following suspension of the Company's shares from trading
on AIM on 25 June 2014. The Company is in contact with a number of
Loan Note holders and as previously notified intends to redeem the
loan notes from the proceeds arising from the sale of either its
operating businesses.
The proposed sale of the Company's animal feed and condiments
businesses continues. As previously announced, the intended sale of
the animal feed business has progressed and the Company has
received a credible proposal from management to acquire the animal
feed business for net asset value, however completion of any
transaction is unable to occur until the condiments business
disposal is completed (as the land on which the animal feed
business operates is collateralised as part of the overall bank
facility with the condiments business). The discussions on the sale
of the condiments business continue with a number of parties, one
of whom, is undertaking due diligence. No offer has been received
at this stage and there is no certainty that any offer will be
received for condiments. In the interim, the condiments business
continues to operate on a cash break-even basis with activity
levels utilising approximately 30% of capacity. The animal feed
business is operating in line with the MBO team's expectations. All
working capital in China is re-invested into maintaining the day to
day operations.
The Company has very limited working capital and the payment of
Loan Notes is reliant on transferring funds from China. Without a
sale of the operating businesses the Company will not have
sufficient funds to redeem the Loan Notes which are due for
redemption on 3 November 2014. Further updates will be provided in
due course.
- Ends -
For further information:
China Food Company Plc
John McLean, Chairman Tel: +44 (0) 7768 031 454
www.chinafoodcompany.com
finnCap
Geoff Nash / Ben Thompson (Corporate Tel: +44 (0) 20 7220
Finance) 0500
Numis Securities
David Poutney (Joint Broker) Tel: +44 (0) 20 7260
1000
Media enquiries:
Abchurch Communications
Henry Harrison-Topham / Canace Wong Tel: +44 (0) 20 7398
7714
canace.wong@abchurch-group.com www.abchurch-group.com
Notes to Editors:
China Food is a well-established food manufacturing business
based in Shandong province in the People's Republic of China, a
region with a population of circa 94 million. A recent report
identified Shandong province as one of the five most attractive
'city clusters' in China, due to the high number of large cities in
the province*. The Group manufactures numerous different product
lines including soya sauce and bean paste, all targeting the
Chinese domestic market, and sold through a network of distributors
and outlets of supermarket chains in the north-eastern region of
the PRC, such as Walmart, Carrefour and Jialejia.
The Chinese sauces, dressings and condiments market is expected
to be worth CNY115 billion (US$15 billion) by 2013, driven by
Chinese population growth and economic prosperity. The Chinese
domestic market is rapidly expanding, and the Group is well
positioned to benefit from China's demographic growth and increased
urbanisation.
The Group's operations are highly scalable and able to support
further growth, and with net assets of GBP32 million (as at 30 June
2013), the prospects for China Food are strong. Further information
on China Food Company can be found at www.chinafoodcompany.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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