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AAAP - Anglo African Agriculture News Story

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Sector
Consumer Defensives
Size
Micro Cap
Market Cap £1.43m
Enterprise Value £2.47m
Revenue £1.77m
Position in Universe 1803rd / 1826

Anglo African Ag PLC: Corporate Update and Issue of Convertible Loan Notes

Tue 23rd March, 2021 11:46am
The information contained within this announcement is deemed to constitute
inside information pursuant to the EU (Withdrawal) Act and amended pursuant to
Market Abuse (Amended) (EU Exit) Regulations 2019. Upon the publication of
this announcement, this inside information is now considered to be in the
public domain.

For immediate release

23 March 2021

Anglo African Agriculture plc

(“AAA” or the “Company”)

Corporate Update and Issue of Convertible Loan Notes

The Company is pleased to provide a progress update on the proposed
acquisition of the Comarco group of companies (the “Comarco Group”). The
Comarco Group is based in Mombasa, Kenya and is engaged in port and marine
logistics activities in East Africa.

Results for the year ended 31 October 2020

The Company earlier today released the Directors’ Report and Financial
Statements for the year ended 31 October 2020 on the London Stock Exchange
news service. A copy of the announcement can be found on the Company’s
website (www.aaaplc.com), in the “News and Documents” section.

Comarco business update

Despite the uncertainty created by Covid-related lockdowns and business
interruptions, the main markets in which Comarco operates have seen a rebound
in activity compared to the calendar year 2020.

Although the LNG project in Mozambique has already formally commenced, there
has been a pause caused by Covid and security concerns. The project is
expected to restart in earnest in July 2021. Comarco Marine Division is making
the necessary preparations in Mombasa and Mozambique with a number of
strategic partners to be ready when this happens. In the meantime the
management team has focused on regional projects and Comarco has secured
contracts in the coastal waters in and around Kenya, Tanzania, Mozambique and
Somalia as well as its first contract on Lake Tanganyika.

In the Comarco Port Division delivery of iron ore into the yard for export is
set to recommence in earnest in early April 2021. Negotiations to secure a
substantial coal import contract are at an advanced stage.  This will
substantially boost throughput volumes and the overall performance of the
port.

In the meantime Comarco’s on-going work with the Fujita Corporation in
support of the Southern Bypass Road Construction project as well as the
soon-to-commence Kilindini harbour bridge construction project, will benefit
both the Marine and Port divisions.

Issue of Convertible Loan Notes

The Company is pleased to announce that it has agreed to issue £603,000
(gross) convertible loan notes (“CLNs”) by converting existing sums due to
creditors and also by raising sums from private investors.  The proceeds will
be used for general working capital purposes and costs associated with the
proposed acquisition of the Comarco Group. The CLNs will attract interest at a
fixed rate of 12% compounded annually, are convertible into the Company’s
ordinary shares at a price of 5p and, if converted, will entitle the
noteholders to receive warrants on a 1:1 basis in respect of ordinary shares
that the CLNs will be converted into and exercisable at a price of 5p per
share for a period of one year from issue. If not converted, the notes will be
repayable on 23 March 2023.

Gross cash proceeds of £220,000 will be received from participating private
investors while the remaining £383,000 will result from settlement of
existing sums due to creditors by the Company.

Certain directors of the Company have agreed to convert the following sums
owed to them by the Company in respect of unpaid salaries into CLNs.

The following directors have agreed to convert the following amounts of their
outstanding director fees  into CLNs on the same basis as the funds secured
from third party investors:

 Matthew Bonner  £42,000    
 Robert Scott    £41,000    
 David Lenigas   £53,000    
 Total           £136,000   

If the CLNs were converted, they would result in the directors receiving the
following number of shares and warrants:

 Director        Number of shares  Percentage of issued share capital  Number of Warrants  
 Matthew Bonner            840,000                3.8%                             840,000 
 Robert Scott              820,000                3.7%                             820,000 
 David Lenigas           1,060,000                4.8%                           1,060,000 
 Total               2,720,000                    12.4%                          2,720,000 

VSA Capital Limited, the Financial Adviser and Corporate Broker to the
Company, and a connected party due to Andrew Monk being a director of both the
Company and VSA Capital Limited, has agreed to convert £212,000 of its
outstanding fees into CLNs on the same basis as the funds secured from third
party investors. If the CLNs were converted, they would result in VSA Capital
receiving the 4,240,000 ordinary shares amounting to 19.3 per cent. of the
Company’s issued share capital, and 4,240,000 warrants.

In addition, the price of warrants attributable to the £250,000 convertible
loan note issued on 1 October 2018 for a two year term and extended to 30
September 2021 will be amended for the warrants to be exercisable at a price
of 5p per share, instead of 7p.

The conversion of sums due to creditors and the capital raise demonstrates the
support the Company has been afforded by private investors as well as its
directors and creditors.

Transaction funding update

The Company is working with Comarco in order to secure the necessary
arrangements to provide sufficient working and expansion capital to conclude
the RTO and put the combined group on a growth path after Admission.

Discussions and due diligences with equity and debt funders are progressing.
Further announcements will be made once binding agreements are executed.

For further information, please visit www.aaaplc.com or www.comarcogroup.com
contact the following:

 Anglo African Agriculture plc                                                                                              
 David Lenigas, Non-Executive Chairman                                              +44 (0)20 7440 0640                     
 Rob Scott, Executive Director                                                      +27 (0)84 6006 001                      
                                                                                                                            
 Comarco Group Simon Phillips (Chief Executive) Charlie Pettifer                    +27 (0)82 6191 081 +44 (0)77 8811 4411  
                                                                                                                            
 VSA Capital Limited (Financial Adviser and Corporate Broker)                       +44 (0)20 3005 5000                     
 Andrew Raca, Maciek Szymanski (Corporate Finance) Andrew Monk (Corporate Broking)                                          



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