TIDMWBI
RNS Number : 1205E
Woodbois Limited
28 June 2023
28 June 2023
Woodbois Limited
("Woodbois" or the "Company")
Subscription, Debt Refinancing & Issue of Warrants
Woodbois, the Africa-focused forestry, timber trading and
afforestation company is pleased to announce that it has raised
GBP6 million by way of a subscription for new ordinary shares at a
price of 0.5 pence (the "Subscription"). This satisfies the cash
shortfall created when the $6m working capital facility was
withdrawn by Sydbank in April 2023, allowing the Company the
flexibility to discharge its remaining obligations to Sydbank in
full, and to benefit from the incentives for early repayment.
The Subscription forms part of a wider financing package,
including a debt-for-equity swap of GBP1.75m and including the
issuance of warrants, described in more detail below. This
financing package transforms the Company's balance sheet and allows
the Company to re-commence its operations in full and return to its
growth path.
The Company expects to have reduced its total debt from c.$15m
as at 31 December 2022 to around $5m by 30 June 2023.
Introduced by Mr Miles Pelham, a former Chair of the Company,
the Subscription is with two Monaco-based British investors, whom
the Directors believe will be highly beneficial to the Company's
future trajectory. With significant expertise in both the financial
and timber sectors, these new investors can help the Company
overcome some of the bottlenecks that have historically hindered
its growth.
Hugh Wade-Jones has subscribed through his investment vehicle
CHCH Ventures, which will own 21.7% of the voting shares of
Woodbois following Admission (as defined below). He is the Founder
of Enness Global, a leading debt-advisory business, and is also
founder of Guernsey based private debt specialist Tenn Capital, a
JV Partnership with US Hedge Fund Elliott Management, which offers
specialised debt solutions for complex transactions.
John Scott has also subscribed and will own 10.85% of the voting
shares following Admission. John has built the Scott Group over the
last 32 years into one of Scotland's most successful and
sustainable businesses with a turnover in excess of $350m per annum
and employing over 1,300 people. He has a wide range of business
interests and has won numerous awards.
Miles Pelham, who was Woodbois Chair between 2016-2019 and a
major shareholder through his wholly owned company Rhino Ventures
Limited ("RVL") will become a Strategic Adviser to the Company for
a six-month term. He will assist in undertaking a comprehensive
review of all business lines intended to maximise shareholder
value.
Directorate Change
After seven years, Paul Dolan, CEO, will be standing down from
this position once a suitable replacement has been found. It is
intended that he will become a non-independent non-executive
director and will also be responsible for the initial phase of the
afforestation project in Gabon within the Company's carbon
division.
Chair, Graeme Thomson said,
"Following the unexpected termination of our working capital
facility in April, we are delighted to emerge from this challenging
period with a vastly improved balance sheet. Our two new
substantial shareholders both bring a welcome combination of
high-level timber industry experience and access to a diversified
pool of capital for our trading and carbon businesses. The energy
and entrepreneurship offered by Miles Pelham is also warmly
welcomed.
"The Board wishes to place on record its thanks to Paul Dolan
for his unstinting efforts in transforming the Group's activities
and are pleased he will remain an integral member of the senior
team. I must also acknowledge and thank our resilient staff and
dedicated board of directors, all of whom have worked relentlessly
and often under high levels of pressure to achieve this welcome
outcome. I also thank our creditors and loyal customers and
shareholders for their understanding and continued support
throughout this unfortunate process.
"We now stand refreshed and ready to deliver on our business
objectives with a strong balance sheet in place, with the benefits
of our recent capex to come, strong new partners and an enviable
position in the buoyant carbon space. I am conscious that the
recent months have been tough but I am confident in our path and am
intent on making sure the comprehensive review of our business
helps deliver meaningful results in both the short and long
term."
The Financing Package
Following the announcements on 19 April 2023 and 6 June 2023
regarding the termination of the loan facility with Sydbank A/S
("Sydbank") and agreement having been reached to repay it no later
than 29 December 2023, the Company has held numerous discussions
with third parties in order to obtain alternative financing on best
available terms.
Having reviewed and considered the available options, the
Company is pleased to have agreed the following financing
package;
-- Subscription for GBP6 million
A Subscription for 1,200,000,000 new ordinary shares of 0.01
pence each in the Company ("Ordinary Shares") (the "Subscription
Shares"), raising GBP6 million, at an issue price of 0.5 pence per
Ordinary Share.
800,000,000 Subscription Shares are being subscribed for by CHCH
Ventures FZ-LLP and 400,000,000 Subscription Shares are being
purchased by John Scott (together the "Subscribers").
Admission of the Subscription Shares to trading on AIM is
expected to occur on Thursday 29 June 2023 and receipt of funds by
the Company no later than Friday 30 June 2023.
-- Conversion of existing debt to a convertible loan
Woodbois has a loan outstanding with RVL, with the balance
outstanding of $2.255 million (inclusive of all accrued interest).
Under the terms of a Deed of Capitalisation, and conditional on
admission of the Subscription Shares, this loan will be
capitalised, at the price of 0.5 pence per share, into 350,000,000
Non-Voting Ordinary Shares (the "Non-Voting Conversion Shares") and
a redemption payment will be made of GBP25,590.
The conversion of this loan to Non-Voting Ordinary Shares has
the effect of significantly reducing the Company's outstanding
financial liabilities.
The Company has also entered into a Commission Agreement with
RVL, in respect of Miles Pelham's assistance in procuring the
Subscription, under which RVL can elect to receive 60,000,000 new
Voting Ordinary Shares (the "Commission Shares") and, subject to
the passing of resolutions at a Company General Meeting to grant
Directors further authority to allot new shares on a non
pre-emptive basis (the "Commission Fee"). The Commission Fee
equates to a 5% commission on the funds raised through the
Subscription. Should the resolutions allowing the Commissions
Shares to be issued not be approved then the Commission Fee will be
settled in cash.
-- Issuance of Warrants
The Company will issue 1,200,000,000 share warrants to the
Subscribers on a 1 for 1 basis, in respect of the Subscription
Shares. Each Warrant gives the holder the right to subscribe for
one new Voting Ordinary Share at a price of 1 pence per Voting
Ordinary Share, at any time until 29 June 2025 (the
"Warrants").
Under the terms of the Deed of Capitalisation and conditional on
the passing of certain resolutions at a Company General Meetings as
described above, RVL will also be issued with 350,000,000 Warrants
on a 1 for 1 basis, in respect of the 350,000,000 Non Voting
Conversion Shares. These Warrants are over Non-Voting Ordinary
Shares in Woodbois.
Subject to the passing of those same resolutions, RVL can also
elect under the Commission Agreement to receive 60,000,000 Warrants
over Voting Ordinary Shares in Woodbois.
(altogether, the "Financing Package")
Use of Funds
The Financing Package will enable the Group to satisfy its other
short-term debt obligations, including settling with Sydbank, to
ramp back up to full operational scale and to commence its pilot on
the afforestation project. The Directors believe it provides the
Company with sufficient working capital for at least the next 12
months.
Related Party Transaction
As RVL has been a substantial shareholder in the Company, as
defined by the AIM Rules for Companies, in the last 12 months, it
is considered a related party of the Company. The arrangement with
RVL, being the entering into of the Deed of Capitalisation and the
Commission Agreement (together the "RV Agreements"), is therefore
considered a related party transaction under the AIM Rules for
Companies.
The Directors, having consulted with Canaccord Genuity Limited,
the Company's Nominated Adviser, consider the terms of the RV
Agreements to be fair and reasonable insofar as the Company's
shareholders are concerned.
Total Voting Rights
Application has been made to the London Stock Exchange for the
1,200,000,000 Subscription Shares to be admitted to trading on AIM
("Admission"). It is expected that Admission will become effective
on or before 8.00 a.m. on 29 June 2023.
Following Admission , the Company's total number of Ordinary
Shares in issue will become 4,289,988,873, which will consist of
3,685,850,726 Voting Ordinary Shares, 19,138,147 Treasury Shares
and 585,000,000 Non-Voting Ordinary Shares. The aforementioned
figure of 3,685,850,726 Voting Ordinary Shares may be used by
shareholders in the Company as the denominator for the calculations
by which they will determine if they are required to notify their
interest in, or a change to their interest in the Company under the
Financial Conduct Authority's Disclosure Guidance and Transparency
Rules.
Enquiries
Woodbois Limited
Graeme Thomson, Chair
Paul Dolan, CEO
Carnel Geddes, CFO +44 (0) 20 7099 1940
Canaccord Genuity, Nominated Adviser and Joint Broker
Henry Fitzgerald O'Connor, Harry Pardoe, Gordon Hamilton +44 (0) 20 7523 8000
Novum Securities, Joint Broker
Colin Rowbury, Jon Bellis +44 (0) 20 7399 9427
Market Abuse Regulation
The information contained within this announcement would have,
prior to its release, constituted inside information as stipulated
under Article 7 of the Market Abuse Regulation (EU) No.596/2014 as
incorporated into UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 as amended by virtue of the Market Abuse
(Amendment) (EU Exit) Regulations 2019 ("UK MAR"). Upon the
publication of this announcement via a regulatory information
service, this inside information will be considered to be in the
public domain. For the purposes of UK MAR, the person responsible
for arranging for the release of this information on behalf of the
Company is Carnel Geddes.
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END
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