REG - Woodbois Limited - Subscription, Debt Refinancing & Issue of Warrants

WoodboisAnnouncement

28/06/2023 07:00

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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 £6 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working capital facility was withdrawn by Sydbank in April 2023, allowing the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 £1.75m 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 £6 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 £6 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 £25,590.

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                                             +44 (0) 20 7099 1940

 Graeme Thomson, Chair

 Paul Dolan, CEO

 Carnel Geddes, CFO

 Canaccord Genuity, Nominated Adviser and Joint Broker        +44 (0) 20 7523 8000

 Henry Fitzgerald O'Connor, Harry Pardoe, Gordon Hamilton

 Novum Securities, Joint Broker                               +44 (0) 20 7399 9427

 Colin Rowbury, Jon Bellis

 

 

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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