REG - Agriterra Ltd - Interim Results <Origin Href="QuoteRef">AGTAR.L</Origin> - Part 2

AgriterraAnnouncement

17/02/2017 07:01

- Part 2: For the preceding part double click  ID:nRSQ1251Xa 

Group's
cocoa business in Sierra Leone, the 'Target Companies') with immediate effect;
payment of the Consideration was deferred for a period of 65 business days
from completion of the MBO (i.e. until 9 January 2017); in the event that the
Consideration was not paid on the due date, the ownership of the Target
Companies would revert immediately to the Group.  Due to factors outside of
their control, the MBO team was unable to secure the finance required to
complete the MBO and accordingly the transaction has not completed subsequent
to the period end. Ownership in the Target Companies has reverted to the
Group. The Group is now working towards achieving maximum shareholder value
from the Cocoa division and will consider all avenues to achieve this,
including (without limitation) disposal and further development. 
 
The net assets of the Cocoa division, all of which related to the Other cocoa
activities, are classified as held for sale as at 30 November 2016 and 31 May
2016. 
 
7.             Borrowings 
 
                 30 November 2016    30 November 2015    31 May 2016  
                 Unaudited           Unaudited           Audited      
                 $000                $000                $000         
                                                                      
 Non-current                                                          
 Bank loans      798                 1,091               1,105        
                                                                      
 Current                                                              
 Bank loans      210                 -                   137          
 Bank overdraft  3,544               4,086               1,675        
 Other           -                   142                 -            
                 3,754               4,228               1,812        
                                                                      
                 4,552               5,319               2,917        
 
 
Grain division 
 
The Group has an overdraft facility of 300,000,000 Metical (30 November 2015:
220,000,000 Metical; 31 May 2016: 300,000,000 Metical) (being approximately
$4,100,000 at the 30 November 2016 Metical to US$ exchange rate) to provide
working capital funding for its grain operations in Mozambique, principally
for the purchase of maize and related operating expenditure. It is secured by
a fixed charge against certain of the Group's property, plant and equipment,
and a floating charge against all of the maize inventory and finished maize
products, and trade receivables. Interest is charged at the counterparty
bank's Mozambique prime rate less 1.75% (30 November 2015: less 3%; 31 May
2016: less 1.75%). As at the date of this report, the interest rate on these
borrowings is 26.25%. Unless it is cancelled by either party, the facility
renews annually on 25 March. As at the period end the Group had undrawn
overdraft borrowing facilities for the Grain division of $606,000 at the 30
November 2016 Metical to US$ exchange rate. 
 
Beef division 
 
At the end of all periods presented, the Group has lending facilities
totalling 105,000,000 Metical ($1,430,000 at the 30 November 2016 Metical to
US$ exchange rate) to continue financing its beef operations in Mozambique.
The facilities comprise 75,000,000 Metical of term loans and a 30,000,000
Metical overdraft. The term loans, which have been fully drawn as at 30
November 2016, carry interest at the bank's prime lending rate plus 0.25%
(currently 28.25%). Capital repayments on these loans commenced during the
period in accordance with their terms. The overdraft renews annually and
carries interest at the bank's prime lending rate (currently 28.00%); the
renewal of the overdraft is in progress at the date of this report. The
lending facilities are secured by a fixed charge against the Group's abattoir
in Chimoio and, by a floating change over all cattle and meat inventories, and
trade receivables. As at the period end the Group had undrawn overdraft
borrowing facilities for the Beef division of $350,000 at the 30 November 2016
Metical to US$ exchange rate. 
 
Other borrowings 
 
Other borrowings at 30 November 2015 represent pre-financing by a leading
global company focussed on natural, organic and speciality foods for the
Group's Cocoa trading operations to source up to 500 tonnes of cocoa on their
behalf. It was unsecured, bore no interest and was repaid through the delivery
of cocoa beans during H2-FY2016. 
 
8.             Share capital 
 
                                                        Authorised       Allotted and fully paid  
                                                        Number           Number                     US$000  
 Ordinary shares of 0.1p each                                                                               
 At 30 November 2015, 31 May 2016 and 30 November 2016  2,345,000,000    1,061,818,478              1,722   
                                                                                                            
 Deferred shares of 0.1p each                                                                               
 At 30 November 2015, 31 May 2016 and 30 November 2016  155,000,000      155,000,000                238     
                                                                                                            
 Total share capital                                                                                        
 At 30 November 2015, 31 May 2016 and 30 November 2016  2,500,000,000    1,216,818,478              1,960   
 
 
9.             Events subsequent to the balance sheet date 
 
9.1.          Failure to complete the MBO of the Cocoa division 
 
As more fully described in note 6.2, during H1-FY2017, the Group agreed the
sale of the Cocoa division to the existing management team via a MBO.
Consideration was payable under this agreement by 9 January 2017.  For reasons
outside of their control, the MBO team was unable to secure the finance
required to complete the MBO and accordingly the transaction has not completed
subsequent to the period end. 
 
This information is provided by RNS
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