REG - Agriterra Ltd - Placing, Broker Option and PILOW Instrument

AgriterraAnnouncement

20/03/2023 08:00

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RNS Number : 4965T  Agriterra Ltd  20 March 2023

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the UK version of the Market
Abuse Regulations (EU) No. 596/2014 ("MAR"). With the publication of this
announcement via a Regulatory Information Service, this inside information is
now considered to be in the public domain.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE
OR IN PART, IN, INTO OR FROM, AUSTRALIA, NEW ZEALAND, CANADA, JAPAN OR THE
REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH THE SAME WOULD BE
UNLAWFUL.

THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER TO BUY, ACQUIRE OR SUBSCRIBE
FOR (OR THE SOLICITATION OF AN OFFER TO BUY, ACQUIRE OR SUBSCRIBE FOR)
ORDINARY SHARES TO ANY PERSON WITH A REGISTERED ADDRESS IN, LOCATED IN, OR
WHO IS A RESIDENT OF, THE UNITED STATES, AUSTRALIA, NEW ZEALAND, CANADA, JAPAN
OR THE REPUBLIC OF SOUTH AFRICA OR IN ANY OTHER JURISDICTION IN WHICH SUCH
OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL OR CONTRAVENE ANY REGISTRATION
OR QUALIFICATION REQUIREMENTS UNDER THE SECURITIES LAWS OF ANY SUCH
JURISDICTION.

 

20 March 2023

Agriterra Limited ('Agriterra' or the 'Company')

Agriterra Limited / Ticker: AGTA / Index: AIM / Sector: Agriculture

Placing, Broker Option and Issue of Inaugural PILOW Instrument

 

Agriterra, the AIM-quoted African agricultural company, is pleased to announce
a placing (the "Placing") to raise £200,000 (gross) through the issue
of 20,000,000 new ordinary shares ("Ordinary Shares") at a price of 1 pence
per share (the "Issue Price") via the Company's broker, Peterhouse Capital
Limited ("Peterhouse"). The Placing has not been underwritten.

Highlights

·     Placing to raise £200,000, through the issue of 20,000,000 new
Ordinary Shares (the "Placing Shares") at the Issue Price

·     Conversion of £200,000 of debt held by Magister Investments
Limited ("Magister") in the Company into 20,000,000 new Ordinary Shares at the
Issue Price ("Conversion Shares") and under the same terms as the Placing
("Debt Conversion")

·     Participants in the Placing and Debt Conversion to receive one
Protected In-the-money Loyalty Warrant ("Pilow") for every Placing Share or
Conversion Share issued

·     Broker option (the "Broker Option") for up to a further 5,000,000
new Ordinary Shares, which could raise up to a further £50,000 enabling
existing shareholders to fully participate in the Placing and the issuance of
associated Pilows via Peterhouse

·     Net proceeds of the Placing, along with any funds raised via the
Broker Option, will be applied primarily towards the Company's Mozbife
division, including the purchasing of an additional 1,500 cattle, as well as
providing additional working capital to allow the Company to support its other
growth initiatives.

·     Admission of the Placing Shares and the Conversion Shares is
expected to occur on or around 23 March 2023 ("Admission")

Caroline Havers, Chair, said: "We totally recognise the very difficult current
fund-raising and stock market environment. Hence our sincere appreciation for
those investors who have participated in today's fund-raise and for those who
may do so under the Broker Option. With this in mind, we readily accepted our
Broker, Peterhouse's proposal that we give all participants free warrants,
particularly as this new type of warrant is primarily designed to offer our
incoming and existing loyal shareholders a future potential opportunity to
exercise at a discounted price.

With this funding in place and the continuing strong financial support from
our majority shareholder, Magister, Agriterra is moving steadily along in
terms of implementing its ambitious growth plans, and we are only too pleased
that with the proposed first ever issuance of these innovative PILOWS, we can
equally be at the forefront in the development of new, shareholder-friendly,
capital market initiatives".

 

Details of the Placing

The Company has resolved to issue 20,000,000 Placing Shares at the Issue Price
raising gross proceeds of £200,000.

Use of Proceeds

The net proceeds of the Placing, along with any funds raised via the Broker
Option, will be applied primarily towards the Company's Mozbife division,
including the purchasing of an additional 1,500 cattle, as well as providing
additional working capital to allow the Company to support its other growth
initiatives.

Terms of the Pilows

As part of the Placing, the Company will issue participants in the Placing,
the Broker Option and Debt Conversion (i.e. Magister) ("Pilow Holders" or
"Holders") with Protected In-the-money LOyalty Warrants ("Pilows"). The Pilows
are being offered on a one for one basis, such that for every share issued
pursuant to the Placing, the Broker Option and the Debt Conversion, investors
will receive one Pilow.

The number of Pilows issued to participants in the Placing and the Debt
Conversion will therefore be 40,000,000. The number of Pilows granted to
existing shareholders under the Broker Option will be determined following the
closing of the Broker Option.

The life of the Pilows will be 24 months from the date of issue unless
exercised via an Issuer Call, details on which are below.

At any time during the life of the Pilows, the Company may call for the
immediate exercise of some or all of the Pilows outstanding (the "Issuer
Call"). The Issuer must state a record date, which must be the last business
day prior to the Issuer Call being made ("Record Date") and must give Holders
a minimum of five (5) business days' notice to exercise. Holders have no right
to exercise the Pilows unless and until an Issuer Call is made.

In order for a Pilow Holder to be entitled to exercise when an Issuer Call is
made, the Holder must, at the Record Date, hold at least the same number of
Ordinary Shares in the Company as the number of Pilows to be exercised. The
exercise price of the Pilows ("Exercise Price") must be set by the Company by
reference to the closing bid price of the Ordinary Shares on the Record Date
and the Exercise Price must be at a discount to that bid price. The level of
discount applied to the Record Date bid price (i.e., the Exercise Price) shall
be at the sole determination of the Company.

When an Issuer Call is made, Holders may choose to exercise their entitlement
of Pilows in whole or in part. Any non-exercised Pilows shall remain extant,
under the same terms and conditions as outlined herein.

Under certain conditions, if the Company undertakes any form of equity placing
during the life of the Pilows, it must, simultaneously with the equity
placing, also make an Issuer Call for all outstanding Pilows, the Exercise
Price being equivalent or less (at the Issuer's sole discretion) to the equity
placing price.

In the event of a take-over or merger of the Issuer, or the acquisition of a
stake by a single entity of more than 29.9% of the Issuer's issued share
capital, the Issuer must immediately undertake an Issuer Call for all
outstanding Pilows, on the terms and conditions outlined above, including as
to pricing.

The Pilows will be constituted under the terms of a Warrant Instrument Deed
and a Warrant Certificate will be issued to each Holder. The Pilows will not
be transferable, other than in exceptional circumstances and with the consent
of the Issuer, and will not be listed or admitted to trading.

Broker Option

In order to provide qualifying Agriterra shareholders ("Existing
Shareholders") and other qualified investors with an opportunity to
participate on the same basis as the investors in the Placing, the Company has
granted Peterhouse a Broker Option over up to 5,000,000 new Ordinary Shares
(or such other number of Ordinary Shares as agreed between the Company and
Peterhouse) ("Broker Option Shares"). Full take up of this number of new
Ordinary Shares under the Broker Option would raise a further £50,000 for
the Company, before expenses.

Existing Shareholders who hold Ordinary Shares in the Company and are on the
register of members as at the close of business on 17 March 2023, will be
given a priority right to participate in the Broker Option and all orders from
such Existing Shareholders will be accepted and processed by Peterhouse,
subject to scale-back in the event of over-subscription under the Broker
Option. The Broker Option has not been underwritten. Peterhouse is entitled to
participate in the Broker Option as principal.

The Broker Option is exercisable by Peterhouse on more than one occasion, at
any time from the time of this announcement to 5 p.m. UK time on 21 March
2023, at its absolute discretion, following consultation with the Company.
There is no obligation on Peterhouse to exercise the Broker Option or to seek
to procure subscribers for the Broker Option. Peterhouse may also, subject to
prior consent of the Company, increase the amount of the Broker Option or
allocate new Ordinary Shares after the time of any initial allocation to any
person submitting a bid after that time.

The Broker Option Shares are not being made available to the public and none
of the Broker Option Shares are being offered or sold in any jurisdiction
where it would be unlawful to do so. No Prospectus will be issued in
connection with the Broker Option.

To subscribe for Broker Option Shares, Existing Shareholders (who are
qualifying) and other qualified investors should communicate their bid to
Peterhouse via their stockbroker as Peterhouse cannot take direct orders from
individual private investors. Existing Shareholders or other interested
parties who wish to register their interest in participating in the Broker
Option Shares should instruct their stockbroker to call Peterhouse on STX:
76086 or 020 7469 0938 or 020 7469 0936 or 020 7220 9797.  Each bid should
state the number of Broker Option Shares the Existing Shareholder wishes to
subscribe for at the Issue Price.

Debt Conversion and Related Party Transaction

As part of the Placing, Magister have agreed to convert £200,000 of debt held
by Magister in the Company into 20,000,000 new Ordinary Shares (the Conversion
Shares) at the Issue Price and under the same terms as the Placing.

Further to the above, Magister have agreed to further convert an equal amount
to that raised as part of the Broker Option under the same terms. The net
effect of this potential further conversion, together with the receipt of the
Conversion Shares, is to maintain Magister's shareholding in the Company at
greater than 50%.

Magister is a Substantial Shareholder of the Company as defined by the AIM
Rules for Companies (the "AIM Rules"), and is represented by Hamish Rudland
and Gary Smith on the Board. In order to effect the Debt Conversion, an
amendment to the conversion price mechanics governing the US$1.8m convertible
facility that the Company entered into with Magister, as announced on 29 July
2022, is required. Effecting the Debt Conversion by Magister therefore
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)
confirm, having consulted with the Company's nominated adviser, Strand Hanson
Limited, that they consider that the terms of the Debt Conversion to be fair
and reasonable insofar as its shareholders are concerned.

Broker Warrant

In connection with the Placing, Peterhouse will be granted warrants to
subscribe for new Ordinary Shares in the capital of the Company, exercisable
at the Issue Price (the "Broker Warrants"). The number of Broker Warrants
granted to Peterhouse will be determined following the closing of the Broker
Option. The Broker Warrants can be exercised for a period of 24 months from
the date of Admission.

Admission to Trading

Application has been made to for the admission of 40,000,000 new Ordinary
Shares (comprising 20,000,000 Placing Shares and 20,000,000 Conversion Shares)
to trading on AIM ("Admission"), which is expected to occur at 8.00 a.m. on or
around 23 March 2023. The new Ordinary Shares issued will rank pari
passu with the Company's existing Ordinary Shares.

Total Voting Rights

Following Admission (and prior to the issue of any new Ordinary Shares
pursuant to the Broker Option) the Company's enlarged issued share capital
will be 61,240,618 Ordinary Shares. The Company holds no Ordinary Shares in
Treasury. This figure of 61,240,618 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 in their interest in, the share capital of the Company under the FCA's
Disclosure Guidance and Transparency Rules.

** ENDS **

 

 

For further information please visit www.agriterra-ltd.com or contact:

 

 Agriterra Limited                   Caroline Havers

                                     caroline@agriterra-ltd.com (mailto:caroline@agriterra-ltd.com)

 Strand Hanson Limited               Ritchie Balmer / James Spinney
 Nominated & Financial Adviser

                                   +44 (0) 207 409 3494

 Peterhouse Capital Limited          Lucy Williams / Rose Greensmith / Eran Zucker

 Broker                              +44 (0) 207 469 0930

 

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