TIDMCMB
RNS Number : 1569O
Cambria Africa PLC
15 May 2018
Cambria Africa Plc
("Cambria" or the "Company")
Proposed Open Offer for GBP4.28 million
Issue of 5 Million Shares to Directors
and
Cancellation of 3.73 Million Shares
Proposed Open Offer
Following the release of the positive interim results on 20
April 2018, Cambria is pleased to announce it is proposing an Open
Offer at 1.10p to raise up to GBP4.28 million which will include up
to GBP1.60 million through the conversion of loans into equity by
Venture Africa Limited ("VAL").
- VAL will limit its Open Offer Participation to converting a
maximum of GBP1.60 million in its outstanding debt to equity.
- Remaining Shareholders' Open Offer Entitlement will be more
than three times that of VAL resulting in the potential dilution of
VAL dependant on the level of Open Offer take-up.
- If all Open Offer Shares are subscribed for (through normal
entitlements and excess allocations) VAL's shareholding would be
diluted to approximately 50.8%.
- Remaining Shareholders will be entitled to apply for
unallocated shares through an Excess Application Facility.
- Shareholders at the Record Date, expected to be on or around
29 May 2018, will be able to participate in the Proposed Open
Offer.
The price of the Open Offer will be 1.10p per Cambria share
("the Open Offer Price") representing a discount of 8% to the
volume weighted average price of 1.19p for the 30 days up to 4 May
2018.
VAL's Open Offer Participation
VAL's combined loan balance to Cambria as at 28 February 2018
was GBP1.80 million, or approximately $2.43 million, being $1.46
million in respect of the VAL Loan and $973,000 in respect of the
VAL Bridging Facility ("the VAL Loans").
VAL as 65.6% shareholder of Cambria supports the Open Offer and
has undertaken to subscribe via converting up to GBP1.60 million of
its outstanding loans into equity: equivalent to up to 145 million
Open Offer Shares. VAL has undertaken to limit its participation to
145 million Open Offer Shares in favour of Remaining Shareholders.
Effectively, VAL will be capping its Open Offer Entitlement to
0.625 Open Offer Shares per Existing Ordinary Share held (compared
to 2 for every one for Remaining Shareholders - more than three
times as many).
VAL's Open Offer Participation is subject to a related party
opinion in accordance with the AIM Rules for Companies, as VAL is a
substantial shareholder and its ultimate beneficiary is Samir
Shasha, Cambria's CEO.
Open Offer Entitlement - Remaining Shareholders
Remaining Cambria shareholders will be entitled to subscribe for
up to 243,678,024 Open Offer Shares in proportion to their current
shareholdings on the basis of 2 Open Offer Shares for every
Existing Ordinary Share held. The higher Entitlement Ratio will
accordingly allow remaining Cambria shareholders to proportionally
increase their shareholdings through participation in the Open
Offer. Should the Open Offer be fully subscribed, VAL's
shareholding would decrease to 50.8%.
Applications for excess allocations
Remaining Shareholders can apply for excess allocations beyond
their pro-rata entitlements. Applications, through an Excess
Application Facility, will be accepted from Remaining Shareholders
to the extent that other shareholders do not take up their full
entitlements. VAL will not apply for any Excess Entitlements.
Financial Effects
A fully subscribed Open Offer would increase Net Asset Value
('NAV') per share by 0.51 cents (US) per share to 1.03 cents (US)
per share from 0.52 cents (US) per share, a 98% improvement. Debt
will fall by 73% from $2.96 million to $804,000 as a result of
VAL's Open Offer Participation. It is noted that the Company's
consolidated financial statements are presented on the historical
cost basis and in the Cambria board's view, reported NAV does not
account for what it considers is the current fair value of its
investments and proprietary technologies.
In the opinion of Cambria Board of Directors, the Open Offer
Price at a Price to Earnings ratio of 2.8 times Cambria's
annualised earnings based on the six month period ended 28 February
2018, presents Cambria shareholders with an attractive opportunity
to increase their shareholding in Cambria through orderly access to
Cambria shares at a fixed price. Importantly, Cambria is one of the
few remaining AIM quoted companies offering investors exposure to
the improving Zimbabwe economic conditions.
The Open Offer proceeds will be utilised to fund acquisition and
the growth of Cambria's existing subsidiaries in Zimbabwe.
Timetable
The Company will publish a detailed announcement regarding the
publication of an Open Offer circular and the Open Offer
implementation timeline including its Record Date, in due course.
Shareholders holding shares at the Record Date will be entitled to
participate in the Proposed Open Offer.
Issue of shares to Directors
Cambria's Directors have since their appointment in 2015
provided services and management support without compensation.
While the Board is willing to continue serving without compensation
at least through the end of FY 2018, the Board has accepted a
proposal from CEO Samir Shasha to issue 5,000,000 Cambria shares
("the Directors' Shares") to Directors and Consultants as
compensation for their services as follows:
Number
Name Position of shares
Mr Paul Turner Non-executive Chairman 1,000,000
Mr Dipak Champaklal
Pandya Non-executive director 1,000,000
Mrs Josephine Petra
Watenphul Non-executive director 2,500,000
Mr Hendrik Johannes
Louw Consultant 500,000
Total 5,000,000
----------------------------------------------- -----------
The Directors' Shares will be issued in terms of Section 38 of
the Isle of Man Companies Act, 2006 ("Section 38") and the
Company's Articles of Association ("the Directors Share Issue").
The Directors Shares Issue will be implemented prior to the Open
Offer.
In accordance with the provisions of Section 38, the Cambria
Board has determined that, in their opinion, the present cash value
of the non-money consideration for the Directors Share Issue is not
less than the amount to be credited for the issue of the Cambria
ordinary shares.
Mr. Samir Shasha, as the ultimate beneficiary of over 65.6% of
Cambria's shares, will not participate in the Directors Share Issue
and will continue to serve without compensation in the current
financial year.
Cancellation of Shares
It was announced on 26 August 2013 that the Company had
concluded the acquisition of the entire issued share capital of
chemical distributor Chemicals & Marketing Company Limited
("C&M"). Following a more in-depth understanding of the
financial affairs of C&M, as previously announced, the Company
and the C&M Vendors entered into a Disengagement Agreement
dated 29 June 2015, in terms of which the parties agreed that the
C&M acquisition will be reversed and the parties be restored to
their initial positions.
The 3,734,756 Cambria ordinary shares registered in the name of
the C&M vendors have only now been fully returned to the
Company and are in the process of being submitted to the Company's
Transfer Agent for cancellation (the "C&M Share
Cancellation").
Number of shares in issue
Cambria confirms that it will apply to AIM for the admission of
5,000,000 ordinary shares of 0.01p each in the Company in respect
of the Directors Share Issue and the cancellation of 3,734,756
shares issued to the C&M Vendors. Open Offer Entitlement
calculations have been done after taking into account the Directors
Share issue and the C&M Share Cancellation.
It is anticipated that trading in the shares issued under the
Directors Share Issue will commence on 22 May 2018 ("Admission").
Following Admission and the C&M Share Cancellation, but prior
to the Open Offer, the Company will have 353,839,012 total shares
in issue. Cambria has no shares in Treasury, therefore this figure
may be used by shareholders, from Admission, as the denominator for
the calculations by which they will determine if they are required
to notify their interest in, or a change in their interest in, the
share capital of the Company under the FCA's Disclosure and
Transparency Rules.
Comment
Commenting on the Proposed Open Offer, Mr. Shasha said, "We
believe that the new political environment in Zimbabwe will provide
a growing market for our current investments and opportunities
which we are uniquely positioned to identify and act on. Cambria is
one of the few AIM listed shares which allows investors to
participate in Zimbabwe's potential. The strengthening of our
balance sheet will allow us to capitalise on opportunities for
expanding our current business units in Zimbabwe and the
acquisition of new businesses. The Proposed Open Offer gives
shareholders the opportunity to increase their level of
participation in Cambria's improved prospects. It provides an
orderly access to Cambria shares at an attractive fixed price of
1.10p."
Contacts
Cambria Africa Plc: www.cambriaafrica.com
+44 (0) 207 669
Samir Shasha 0115
WH Ireland Limited: www.wh-ireland.co.uk
+44 (0) 207 220
James Joyce / Alex Bond 1666
This information is provided by RNS
The company news service from the London Stock Exchange
END
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