Cambria Africa PLC VAL Loan Conversion, Open Offer and VAL Loan Terms (3090Q)
28 November 2016 - 12:11PM
UK Regulatory
TIDMCMB
RNS Number : 3090Q
Cambria Africa PLC
28 November 2016
Cambria Africa Plc
("Cambria" or the "Company")
Ventures Africa Limited ("VAL") Loan Conversion,
Open Offer
and
VAL Loan Terms
VAL Loan Conversion and Open Offer
The Company advises that it has reached agreement with VAL
regarding the:
1) conversion into Cambria ordinary shares of GBP1.25 million or
approximately $1.55 million of its $2.9 million loan to Cambria
("the VAL Loan Conversion"), and
2) terms of the remaining balance of the VAL Loan.
The VAL Loan Conversion will significantly strengthen Cambria's
balance sheet and will further align the interests of its CEO, Mr
Samir Shasha, with that of Cambria shareholders. The price of the
VAL Loan Conversion will be 1.00p per Cambria share ("the
Conversion Price"), representing a premium of 11% to the 10 day
volume weighted average price of 0.90p for the 10 days up to 24
November 2016. VAL will receive 125 million ordinary shares in
Cambria in return for its GBP1.25 million VAL Loan Conversion.
After the VAL Loan Conversion, the Company's total debt obligation
will fall 36% from $4.35 million to $2.8 million.
Cambria will extend an offer of up to 125 million new ordinary
shares to the remaining Cambria shareholders on terms equal to that
of the VAL Loan Conversion ("Open Offer"). Cambria shareholders may
subscribe for new Cambria shares in proportion to their current
shareholdings. Applications for excess allocations, over and above
the relevant shareholder's pro-rata entitlements, will be accepted
from shareholders to the extent that other shareholders do not take
up their full entitlements. For the avoidance of doubt, VAL will
not take up any further shares in the Open Offer beyond the 125
million shares it will receive from the VAL Loan Conversion.
Any Open Offer proceeds will be utilised to fund growth in
Cambria's core subsidiaries in Zimbabwe.
The Cambria Board believes that the Conversion Price is
underpinned by the value of Cambria's underlying subsidiaries, and
given that all shareholders are being treated equally, will result
in less dilution for shareholders at any level of the Open Offer
participation.
The Conversion Price (at a premium) will increase the Net Asset
Value ('NAV')per share and will have a greater impact on NAV per
share relative to a conversion at the current market price or at a
discount. Even before participation by other shareholders in the
Open Offer, the increase in NAV will be $1.55 million or 0.46 cents
(US) per share. The greater the participation of other shareholders
in the Open Offer, the greater this impact will be on NAV per
share. It is noted that the Company's consolidated financial
statements are presented on the historical cost basis and , in the
board's view, reported NAV does not account for the fair value of
its investments and proprietary technologies.
The Company will publish a detailed announcement regarding the
Open Offer implementation timeline and the publication of an Open
Offer circular to be sent to shareholders, in due course.
VAL Loan Terms
In its announcement of 3 May 2016, the Company referred to the
VAL Loan and the finalisation of its terms in accordance with AIM
Rule 13. The Company is also pleased to advise that it has reached
agreement on the terms of the VAL Loan which will fall to a total
$1.35 million from $2.9 million after the VAL Loan Conversion, as
follows:
1. The VAL Loan will carry interest at 8% per annum
retrospectively from the inception of the VAL Loan. The cost of
this funding is more favourable than the funding costs including
fees, previously charged to Cambria by external lenders;
2. The VAL Loan is repayable after three years on 30 November
2019 with early repayment at the election of VAL, from any proceeds
realised from a Liquidity Event. A Liquidity Event shall
comprise:
a. the sale, whether partly or in full, of Cambria's investments; and/or
b. the proceeds realised from the settlement of or an award of
the Company's US$ 1.8 million counterclaim against Consilium;
3. The VAL Loan will be secured through a pledge and cession
over the Company's shares in its subsidiaries.
Related Party
VAL is the controlling shareholder of Cambria. The VAL Loan and
the VAL Loan Conversion are accordingly related party transactions
under the AIM Rules for Companies. The independent directors, being
all the directors with the exception of Mr Samir Shasha, having
consulted with WH Ireland its nominated adviser, consider the terms
of the VAL Loan and VAL Loan Conversion to be fair and reasonable
insofar as shareholders of the Company are concerned. Since Mr
Samir Shasha, the CEO of Cambria, is the ultimate beneficial owner
of VAL, he was excluded from consideration of the fair and
reasonableness of the VAL Loan.
Comment
Commenting on the VAL loan conversion, Mr. Shasha said,
"Speaking from VAL's perspective, I believe in Cambria's value
proposition and the future of Zimbabwe. VAL's conversion,
particularly at a premium to the market, is doubling down on this
conviction. The Open Offer provides an opportunity for shareholders
to exercise their allocations through orderly access to Cambria
shares at a fixed price of 1.00p. I hope our fellow shareholders
will use this as an opportunity to send a vote of confidence in
Cambria's new management."
Contacts
Cambria Africa Plc: www.cambriaafrica.com
Samir Shasha +44 (0) 207 669 0115
Email: info@cambriaafrica.com
WH Ireland Limited: www.wh-ireland.co.uk
James Joyce / Nick Prowting +44 (0) 20 7220 1666
This information is provided by RNS
The company news service from the London Stock Exchange
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