REG - Obtala Limited - Trade Finance Update <Origin Href="QuoteRef">OBT.L</Origin>

WoodboisAnnouncement

02/01/2018 07:05

RNS Number : 5925A
Obtala Limited
02 January 2018
02 January 2018 
Obtala Limited
("Obtala", the "Group" or the "Company")
(AIM: OBT)
Trade Finance Update
Obtala Limited (AIM: OBT), the African focused agricultural and forestry company, is pleased to announce the initial funding of Obtala (Hong Kong) Limited (a wholly subsidiary of the Company) the proceeds of which will be used to finance the Group's timber trading activities. These funds are complementary to and not a replacement for any external trade finance facility, the size and terms of which will be announced once finalized following the completion of legal documentation. 
An initial $1m has been funded in the form of a 10-year loan to Obtala (Hong Kong) Limited. The loan bears interest at 11.5% per annum payable annually in arrears. Funds can be used for financing receivables, inventory and supplier pre-financing and will be put to work immediately whilst external trade finance is being finalised. The Group aims to grow this facility to support the utilization of external trade finance. 
Certain Directors of the Company have agreed to invest the following principal amounts:



Paul Dolan
Chief Executive Officer
$250,000
Martin Collins
Deputy Chairman
$250,000
Tom Holroyd
Director, Argento Ltd
$250,000
Jessica Camus
Director, Obtala Ltd
$200,000
Adam Barker
Chief Strategy Officer
$50,000
Paul Dolan, Obtala CEO, commented: "Since the completion of the WoodBois acquisition we have conducted in-depth analysis in order to understand where the true competitive advantage and highest margin opportunities are, in sourcing and trading African timber. We are close to the completion of due diligence with an external trade finance provider that can best support our working capital requirements, not only for timber trading but also from the increased levels of production we are expecting in both Gabon and Mozambique in 2018. This combination of internal and external trade finance will allow us to optimize profitability while growing the timber trading division during 2018."
The facility is classified as a related party transaction under the AIM Rules. The independent directors, being Miles Pelham, Carnel Geddes and Kevin Milne, having consulted Northland Capital Partners as Nominated Adviser,consider that the terms are fair and reasonable insofar as shareholders are concerned.
Obtala Limited
Miles Pelham - Chairman
Paul Dolan - CEO
Martin Collins - Deputy Chairman
www.obtala.com
+44 (0)20 7099 1940
Northland Capital Partners Ltd (Nomad and Joint Broker)
Tom Price
David Hignell
+44 (0)20 3861 6625
Brandon Hill Capital (Joint Broker)
Jonathan Evans
Beaufort Securities Limited (Joint Broker)
Jon Belliss
+44 (0)20 3463 5000
+44 (0)20 7382 8300

This information is provided by RNS
The company news service from the London Stock Exchange
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