Agriterra Ltd US$4.6m financing and Related Party Transaction (8367N)
26 Mai 2020 - 8:01AM
UK Regulatory
TIDMAGTA
RNS Number : 8367N
Agriterra Ltd
26 May 2020
The information communicated 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.
26 May 2020
Agriterra Limited ('Agriterra' or the 'Company')
Agriterra Limited / Ticker: AGTA / Index: AIM / Sector:
Agriculture
US$4.6 million financing and Related Party Transaction
Agriterra Limited, the AIM-quoted African agricultural company,
is pleased to announce that its wholly-owned subsidiary,
Desenvolvemento E Comercializacao Agricola Limitada ("DECA") has
secured a c. US$4.6m working capital facility (the "Facility") from
First Capital Bank, S.A. (the "Bank") to enable it to finance and
secure the purchase of up to 42,000 tonnes of raw maize during the
period May 2020 to August 2020 (the "Financed Maize"). The Financed
Maize will then be processed and sold by DECA from its facilities
in Chimoio, Mozambique into the local wholesale, retail and NGO
markets.
The material terms of the Facility from the Bank are as
follows:
-- Revolving overdraft facility of MZN 306m (c. US$4.6m) for 12 months
-- Interest rate of 85% of Mozambique Central Bank prime rate, which is currently 17.90%
-- Interest payment holiday for 6 months
-- Arrangement fees of 1.1%
As a condition to providing the Facility, the Bank has required
that the Company provide a cash backed guarantee as security (the
"Bank Security"). In order to satisfy this condition, the Company
has entered into an agreement with Magister Investments Limited
("Magister"), the Company's 50.01 per cent. shareholder, pursuant
to which Magister has agreed to provide the necessary security (the
"Magister Guarantee").
The material terms of the Magister Guarantee are as follows:
-- Agriterra will pay Magister a fee of 1.75% of the total
facility amount (the "Guarantee Fee") being US$80,500 shortly after
entering into the Facility/Magister Guarantee.
-- Provision of the Magister Guarantee by Magister is subject to
the prior and ongoing satisfaction of the certain revenue account
segregation and reporting conditions with which DECA and AGTA agree
to comply.
-- In the event that the Bank take action to enforce the Bank
Security or in the event of a breach of the Magister Guarantee by
Agriterra or by DECA (as applicable), in order to recover the
equivalent amount called upon by the Bank plus interest calculated
at 8% per annum (the "Restitution Amount"), Magister shall be
entitled by notice in writing to exercise one of the following
rights in the following order:
Ø to require Agriterra to issue new ordinary shares in the
capital of AGTA to Magister, equal in value to the Restitution
Amount (at the par value of Agriterra's ordinary shares, provided
that the prevailing Agriterra share price at such time is no less
than the par value per share);
Ø if compliance with the foregoing is not possible, to require
Agriterra to create and issue to Magister new "8% preference
convertible" shares in the capital of Agriterra (convertible into
ordinary shares in Agriterra at a price equal to the par value per
share), equal in value to the Restitution Amount;
Ø if compliance with the foregoing is not possible, to require
the Agriterra group to dispose of fixed asset(s) owned with a value
equal to the Restitution Amount (after transaction costs),
determined by independent valuation, to a 3rd party and to then pay
such sale proceeds to Magister; and
Ø if compliance with the foregoing is not possible, to the
extent legally permitted, to require AGTA to take such steps as are
necessary to require the transfer by a subsidiary of Agriterra of
asset(s) with a value equal to the Restitution Amount, determined
by independent valuation, to Magister.
Related Party Transaction
The entering into the Magister Guarantee constitutes a related
party transaction under Rule 13 of AIM Rules. In this context,
Caroline Havers, Neil Clayton and Sergio Zandamela (being the
Directors on the Board who do not represent Magister) confirm,
having consulted with the Company's nominated adviser, Strand
Hanson Limited, that they consider that the terms of the Magister
Guarantee to be fair and reasonable insofar as its shareholders are
concerned.
Caroline Havers, Executive Chair, said: "We are delighted to
have secured this significant facility which should enable us to
benefit from a strengthened purchasing position and set up our
maize operations for a successful trading, processing and sales
season. We could not have achieved access to these funds without
the support of our majority shareholder, Magister Investments
Limited, and are grateful that they have agreed to provide the cash
backed guarantee which secures the facility. We believe that this
demonstrates their commitment to our business and the faith and
belief which we all have in the ability of our in-country
management team to successfully manage an increased buying
programme."
** ENDS **
For further information please visit www.agriterra-ltd.com or
contact:
Agriterra Limited Strand Hanson Limited
(Nominated & Financial Adviser and
Broker)
============================ ====================================
Caroline Havers James Spinney / Ritchie Balmer
caroline@agriterra-ltd.com +44 (0) 207 409 3494
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END
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