Africa Opportunity Fund Limited Award of Arbitrator in the Shoprite matter (8063V)
February 01 2017 - 1:14PM
UK Regulatory
TIDMAOF
RNS Number : 8063V
Africa Opportunity Fund Limited
01 February 2017
1 February 2017
Africa Opportunity Fund Limited ("AOF" or the "Company")
Award of Arbitrator in the Shoprite matter
In the Company's half yearly report for the six months ended 30
June 2016 it was reported that the arbitration proceedings between
the Company and Shoprite Holdings Limited ("Shoprite") had
commenced in August 2016 and it was anticipated that the arbitrator
would deliver his decision by the end of the year.
The arbitrator delivered his award on 27 January 2017. The
arbitrator concluded that the Company did not obtain good title to
637,528 of the 679,145 shares of Shoprite that it believed it had
purchased, and in respect of such shares, it was therefore not
entitled to dividends that had accrued. Unless this award is
reversed on appeal, and leaving aside any remedy that the Company
may have to recover the original purchase price of the shares it
believed it had purchased, the current estimated loss to the
Company (including accrued dividends) is approximately US $5
million, which equates to a reduction in the net asset value
("NAV") per ordinary share of approximately $0.12. The most
recently released weekly NAV estimate for the ordinary shares was
$0.901 per share as at close of business on 20 January 2017. The
net asset value of the C shares is unaffected by the arbitration
award.
The Board wishes to reiterate that it believes the Company has
full and good title to all the shares in Shoprite which it
purchased, primarily because the shares were sold on a recognised
stock exchange to numerous parties. The Board intends to appeal
this award and will continue working to recover full value for
shareholders. Any such appeal must be notified within 15 court days
of the award. However, in view of the current award and after
consultation with AOF's auditors, the Board has decided to take a
full provision of $0.12 against the ordinary share NAV as the most
conservative approach, pending the outcome of the appeal process.
The next NAV to be announced by the Company calculated as of the
close of business on 31 January 2017 will include this
provision.
The Company will issue further announcements in due course to
keep shareholders apprised of developments in this matter.
Background to the Shoprite arbitration
The Company acquired 679,145 Shoprite's shares on the Lusaka
Stock Exchange ("LuSE") in the normal course of business through
Zambian brokers. Shoprite shares were entrusted to a Zambian law
firm, Lewis Nathan Advocates ("Lewis Nathan"), which served as
transfer agent for the Shoprite shares listed on LuSE and also as
attorney-in-fact for Shoprite to sell those shares. However, the
law firm was accused by Shoprite in mid-2011 of selling the shares
contrary to restrictions established by Shoprite. Shoprite further
contended that it did not receive the proceeds from the trades made
by Lewis Nathan. Shoprite has sued Lewis Nathan to obtain the
proceeds from those trades. It has also placed dividends due to its
shareholders on the Zambian register into an escrow account,
pending the outcome of its lawsuit against Lewis Nathan. The
Company sued Shoprite in the Western Cape High Court in 2014 for
unpaid dividends, agreeing subsequently to the arbitration which
has culminated in the award of 27 January 2017.
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
For further information please contact:
Africa Opportunity Fund Limited
Francis Daniels Tel: +2711 684 1528
Liberum (Corporate Broker)
Henry Freeman Tel: +44 20 3100 2000
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCOKDDDFBKDBBK
(END) Dow Jones Newswires
February 01, 2017 13:14 ET (18:14 GMT)
Africa Opportunity (LSE:AOF)
Historical Stock Chart
From Mar 2024 to Apr 2024
Africa Opportunity (LSE:AOF)
Historical Stock Chart
From Apr 2023 to Apr 2024