TIDMAGTA
RNS Number : 7207C
Agriterra Ltd
14 June 2023
14 June 2023
Agriterra Limited ('Agriterra' or the 'Company')
Agriterra Limited / Ticker: AGTA / Index: AIM / Sector:
Agriculture
US$1.9 million debt facility 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 US$1.9m working capital facility (the "Facility") from
First Capital Bank, S.A. (the "Bank") to enable it to finance and
support its maize buying operations (the "Financed Maize"). The
Financed Maize will 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$1.9 million (in
Mozambican Metical) until June 2024
-- Interest rate set at the prime lending rate (Mozambique
Central Bank) plus 0.5%, which is equivalent to 24%.
-- Arrangement fees and commission of 1%.
Caroline Havers, Non-Executive Chair, said: "We are delighted to
have secured this financing and repeated support from First Capital
Bank. This will enable us to benefit from a strengthened purchasing
position and set up our maize operations for a successful trading,
processing and sales season. We also 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."
Further Details on the Facility
As a condition to providing the Facility, the Bank required that
the Company provide a cash backed guarantee (equal to 110% of the
size of the Facility) 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 50.58 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$35,000, 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 volume-weighted average trading price of AGTA's
shares over the 5 trading days prior to the occurrence of an event
of default;
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 may 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 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.
Agriterra Limited Caroline Havers
caroline@agriterra-ltd.com
--------------------------------
Strand Hanson Limited Ritchie Balmer / James Spinney
--------------------------------
(Nominated & Financial Adviser) Tel: +44 (0) 207 409 3494
--------------------------------
Peterhouse Capital Limited Lucy Williams / Rose Greensmith
(Broker) / Eran Zucker
+44 (0) 207 469 0930
--------------------------------
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END
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