Cradle Arc PLC Provisional Judicial Management Order of Leboam (1176L)
20 December 2018 - 9:15PM
UK Regulatory
TIDMCRA
RNS Number : 1176L
Cradle Arc PLC
20 December 2018
Cradle Arc plc / EPIC: CRA.L / Market: AIM / Sector: Mining
20 December 2018
Cradle Arc plc
("Cradle Arc" or the "Company")
Provisional Judicial Management Order of Leboam Holdings
(Proprietary) Ltd
Cradle Arc (AIM: CRA), the African focused base and precious
metals exploration and production company, announces that the
Botswana High Court has issued a Provisional Judicial Management
Order (the "Order") for its 60 per cent. owned subsidiary, Leboam
Holdings (Proprietary) Ltd ("Leboam"), the holding company of the
Mowana Copper Mine in Botswana ("Mowana" or the "Mine"). The Order
became effective on 18 December 2018.
In terms of the Order, Mr John Hinchcliffe, an accredited and
registered Chartered Accountant in Botswana has now been appointed
as the Provisional Judicial Manager. Pursuant to the terms of the
Order, with effect from 18 December 2018, the Provisional Judicial
Manager shall:
-- Secure and preserve the assets of Leboam.
-- Prevent the mismanagement of Leboam.
-- Ensure Leboam is able to meet its obligations.
-- Do all things necessary to preserve the interests of the members and creditors of Leboam.
The Provisional Judicial Manager is required to file a report
regarding the financial position of Leboam to a meeting of
creditors of the company, to be convened before the Master of the
High Court, by no later than 18 February 2019.
Pursuant to the terms of the Order, Leboam has until 21 February
2019 to submit its answering affidavit, or business plan going
forward following the meeting of the creditors of Leboam. The
matter will thus be set down for hearing on 28 February 2019 for
the Court to determine if Leboam be discharged from Provisional
Judicial Management or make any other order it deems fit. Further
to its announcement of 18 December 2018, the Company shall transfer
its Provisional Liquidation application to the Gaborone High Court
to be heard as one on 28 February 2019.
The Company has commenced discussions with various existing and
potential funders in order to find a solution to the financing
required for Leboam and the future operations of the project. There
can be no guarantee that the Company will be able to secure the
necessary financing in order to support a credible business plan to
the Botswana High Court by 21 February 2019.
In addition, as well as needing to raise funds for Leboam as set
out above, the Company needs to raise funds to finance its
corporate overheads and general administration costs, as well as to
maintain and/or develop its other assets. Whilst the Board is
confident it will be able to raise the required funds, should such
funds not be forthcoming in the near term, the Board believes that
it is highly likely that the Company would become insolvent, and
insolvency proceedings, such as administration or liquidation, will
be commenced in respect of the Company.
As set out in note 4 to the Company's annual report and accounts
for the year ended 31 December 2017, the Company had a VAT
receivable of GBP546,406 and there is an ongoing inquiry by HMRC
regarding the Company's VAT registration. The Directors' remain
confident that the VAT registration in place for the Company is
fully compliant and are confident that a repayment of VAT to the
Company will become due in the near term.
Further announcements regarding the Company's progress on these
matters will be made as and when appropriate.
Kevin van Wouw, CEO of Cradle Arc, commented:
"The Company will co-operate with the Provisional Judicial
Manager in order to seek the best financing and operational plan
for Leboam, to resolve the group's current financial
difficulties.
"Following from the impasse between Fujax and the Secured
Lenders to the project, where the working capital facility agreed
was not completed and which has directly led to this situation, we
have commenced discussions with various existing and potential
funders in order to attempt to secure a suitable financing solution
for the project going forward.
"The Company has made significant investment in this project,
and as such we will continue to preserve the value where possible
by following these processes to their conclusion."
**ENDS**
For further information on the Company, please visit
www.cradlearc.com or contact:
Cradle Arc plc Tel: +44 (0)20 7637 5216
Kevin van Wouw
Mark Jones
Strand Hanson Limited Tel: +44 (0)20 7409 3494
James Spinney
Matthew Chandler
James Dance
SP Angel Corporate Finance Tel: +44 (0)20 3470 0470
LLP
Ewan Leggat
John Meyer
Tavistock Communications Tel: +44 (0)20 7920 3150
Limited M: +44 (0)79 7729 7903
Charles Vivian M: +44 (0)77 8597 4264
Gareth Tredway
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) 596/2014.
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END
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