Anglo African Agriculture plc
(“AAA” or the “Company”)
AAA signs agreement to receive funding and sell its 49.9% interest in the Guar Bean JV
Anglo African Agriculture plc (LSE: AAAP), the London Main board listed food manufacturing company announces that its wholly owned subsidiary Dynamic Intertrade (Pty) Ltd (“DI”) and its Italian Company joint venture partner, have signed an agreement (the “Agreement”) with Prime Meridian Resources Corporation (“PMR”), a TSX listed company, to receive initial funding for and to sell, within 120 days from the signature of the Agreement, the loss making African Projects and Ventures (Pty) Limited (“APV”) guar business in South Africa (the “Transaction”).
Under the terms of the deal, APV will, by way of loans, receive ZAR 560,000 (approximately £31,500) to settle existing creditors and will also receive monthly payments of ZAR 150,000 (approximately £8,400) to fund its ongoing operations for a further 4 months. Additionally, APV will receive a final payment of ZAR 6,343,297 (approximately £356,000) of which ZAR 1,400,565 will repay the loans made by DI to APV and the balance will be used to repay loans made by Lamberti to APV. Should this point be reached, PMR will then also acquire APV for a nominal price and assume all outstanding liabilities. PMR is currently in the process of a fundraising on the TSX-V market. The completion of the Transaction, is subject to PMR securing funding, and is expected to conclude in early 2017.
David Lenigas, the Company’s Chairman, commented:
“This deal is an important step in cleaning up the Company’s loss making activities and significantly means that AAA no longer has the burden of funding the loss making guar business. On final closure of this deal with PMR, AAA will be able to direct the ZAR 1.4 million sale proceeds and the money currently being spent on the loss making APV directly in to growing our core business of manufacturing, import and distribution of herbs, spices and seasonings for the food manufacturing sector where we see significant upside.”
Key Terms of the Agreement and Transaction
Under the terms of the Agreement and the Transaction, PMR and DI have agreed to the following:
PMR will provide APV an initial refundable loan of ZAR 560,000 incurring an annual interest rate of LIBOR to eliminate APV’s current payables and liabilities;
PMR will provide APV a second refundable loan facility which will consist of monthly advances of ZAR 150,000 for 4 months incurring an annual interest rate of LIBOR to assist with the working capital of APV;
A final refundable loan facility of ZAR 6,343,297 (approximately £356,000) will be provided by PMR to APV to repay the ZAR 1,400,565 and ZAR 4,942,732 owed to DI and Lamberti respectively. This loan facility will only be payable by PMR should certain PMR corporate fundraising objectives be met;
Once the abovementioned fundraising objectives are met and the provision of the three loan facilities to APV is complete, PMR will acquire APV for ZAR10 (£1).
All of the loan facilities that form part of the Transaction shall be repayable to PMR should the full Transaction not complete. Repayment of the loans will be made from APV’s ongoing operations as soon as practicable.
For further information, please contact:
| Anglo African Agriculture plc |
+44 (0) 20 7440 0640 |
David Lenigas, Non-Executive Chairman
Rob Scott, Non-Executive Director |
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| VSA Capital Limited (Financial Adviser and Broker) |
+44 (0) 20 3005 5000 |
| Andrew Raca / James Asensio |
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