Agriterra Ltd MBO of Sierra Leone Cocoa Assets (8038L)
October 05 2016 - 10:23AM
UK Regulatory
TIDMAGTA
RNS Number : 8038L
Agriterra Ltd
05 October 2016
Agriterra Ltd / Ticker: AGTA / Index: AIM / Sector:
Agriculture
5 October 2016
Agriterra Ltd ('Agriterra' or the 'Company')
MBO of Sierra Leone Cocoa Assets
Agriterra announces that it has completed the sale of its Sierra
Leone cocoa assets in a management buy-out transaction (the "MBO")
for a cash consideration of US$750,000 (the "Consideration").
Under the terms of the MBO, the Company has disposed of its
interests in Baranca Tide Limited and West Africa Cocoa Services
Limited (the intermediate holdings companies which hold the assets
comprising the Company's cocoa business in Sierra Leone, the
"Target Companies") with immediate effect; payment of the
Consideration will be deferred for a period of 65 business days
from completion of the MBO; in the event that the Consideration is
not paid on the due date, the ownership of the Target Companies
will immediately revert to the Company. The Target Companies have
been sold in excess of their collective current book value of
approximately US$460,000.
As shareholders will be aware, the Company has successfully
established the necessary infrastructure from which a large scale
commercial cocoa plantation and trading business can be developed
in Sierra Leone. The next stage in the development of these assets
requires significant capital investment. Given the impact of Ebola
on the West African region as a whole and the lack of investment
appetite from traditional finance sources, the board have formed
the view at this time, after due investigations and careful
consideration, that the Company is unlikely to be able to raise the
finance to continue with the development of the cocoa plantation in
the foreseeable future. In this context, the board therefore
believe that it is in the best interests of the Company to complete
the MBO to bolster the Company's cash reserves and to enable the
MBO team to access other finance sources, such as dedicated
development and sustainability funds.
The MBO is deemed to be a related party transaction pursuant to
AIM Rule 13, as the owner of the vehicle through which the MBO is
being effected is Adrian Simpson, a director of the Company's
Sierra Leonean subsidiaries, which are indirectly the subject of
the MBO. The directors of the Company, having consulted with Cantor
Fitzgerald Europe, its nominated adviser, consider that the terms
of the MBO are fair and reasonable in so far as its shareholders
are concerned.
The sale of these assets pursuant to the MBO is part of the
Company's ongoing rationalisation programme. The proceeds of the
sale of these assets will be applied towards the Company's general
working capital requirements.
Andrew Groves, CEO of Agriterra commented "We are proud of the
progress which we have made in Sierra Leone since 2011 in our
efforts to establish an independent commercial-scale cocoa
plantation and trading business. We are particularly proud to have
been one of the only foreign companies to have retained a presence
in the country through the Ebola crisis and to have contributed to
the relief efforts through logistical support. As we now step away
from this venture we are leaving a fantastic foundation from which
Adrian and his team can look to expand operations and raise finance
through avenues which were not available to Agriterra. Separately,
the reduced ongoing cash outlay from cocoa operations will enable
us to focus on core activities, whilst at the same time we retain
our prospective palm oil assets in Sierra Leone."
** ENDS **
For further information please visit www.agriterra-ltd.com or
contact:
Andrew Groves Agriterra Ltd Tel: +44 (0)
20 7408 9200
Daniel Cassiano-Silva Agriterra Ltd Tel: +44 (0)
20 7408 9200
David Foreman Cantor Fitzgerald Tel: +44 (0)
Europe 20 7894 7000
Michael Reynolds Cantor Fitzgerald Tel: +44 (0)
Europe 20 7894 7000
This information is provided by RNS
The company news service from the London Stock Exchange
END
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