TIDMAGTA
RNS Number : 4044F
Agriterra Ltd
15 July 2021
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.
15 July 2021
Agriterra Limited ('Agriterra' or the 'Company')
Agriterra Limited / Ticker: AGTA / Index: AIM / Sector:
Agriculture
US$6.1 million refinancing 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 renewal, and extension in quantum to US$6.1m, of its
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 39,000 tonnes of raw maize during the period July 2021 to
April 2022 (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 equivalent to US$6.1 million (in
Mozambican Metical) until 31 May 2022;
-- Interest rate set at the prime lending rate (Mozambique
Central Bank) less 3.75%. Prime lending rate is currently at
17.90%. The Bank has the right to revise the interest rate if the
prime lending rate decreases to 16% in consultation with DECA;
-- Arrangement fees of 0.5% of the approved limit.
As a condition to providing the Facility, and following the same
procedure as announced on 26 May 2020, the Bank 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 be liable to pay Magister a fee of 1.75% of
the amount drawn under the Facility (the "Guarantee Fee"), being a
maximum amount of US$106,750, which will be invoiced by Magister as
the Facility is drawn down.
-- Provision of the Magister Guarantee 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;
-- subject to certain conditions, the Magister Guarantee shall
be renewed and/or extended automatically to reflect any future
renewals, amendments and/or extensions to the terms of the Facility
(assuming a guarantee remains required).
Related Party Transaction
Entering into the Magister Guarantee constitutes a related party
transaction under Rule 13 of AIM Rules. In this context, Caroline
Havers, Neil Clayton, Rui Sant'ana Afonso and Sergio Zandamela
(being the Directors on the Board who are considered to be
independent of Magister) consider, having consulted with the
Company's nominated adviser, Strand Hanson Limited, that the terms
of the Magister Guarantee are fair and reasonable insofar as its
shareholders are concerned.
Caroline Havers, Executive Chair, said: "We are delighted to
have refinanced and extended 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. Again, we thank our majority shareholder,
Magister Investments Limited, for their support in providing the
cash backed guarantee which secures the facility, which
demonstrates their ongoing commitment to and faith in our
operational plans and management team."
** 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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