31st May 2016 10:00
LONDON (Alliance News) - Agricultural and timber company Obtala Resources Ltd on Tuesday said it has received the second and final payment from Hong Kong-based Global Timber Investment Ltd, for the minority 15% shareholding in its forestry concessions.
Obtala said it received the USD300,000 payment from Global Timber as per the investment agreement announced earlier this year, meaning it has now received the total USD3.0 million sum for its forestry concession.
In February, Obtala said three independent investors, including Global Timber, agreed to inject a combined USD3.0 million into its forestry division in return for minority equity interests in the company's forest concessions in Mozambique. The investors also received certain off-take rights under the deal.
Obtala has a 75% stake in the forestry business and created three individual special purpose vehicles to manage the administration and economic rights of each investor and their respective offtake arrangements.
In return for its USD900,000 investment Global Timber received a 15% stake in the special purpose vehicle and the economic rights covering "up to" 3,000 hectares.
The other two investors are Basic Minerals Ltd, a company based in Hong Kong and Russia, which has invested USD900,000 in return for a 17.5% stake in the special purpose vehicle and the economic rights of up to 3,500 hectares, and private US investor George Miller, who received a 12.5% stake and economic rights of us to 6,250 hectares for his USD1.6 million investment.
The proceeds from the investment are being used to build two kilns at its operations to improve the timber quality and the recovery rates, as well as for the development of a new sales and distribution centre in Maputo, the capital of Mozambique, to serve new export markets and enhance its domestic offering.
The proceeds are also being used as working capital and to form a development fund aimed at providing labour, health and education programmes in the country.
Shares in Obtala were down 3.4% at 8.09 pence on Tuesday.
By Hannah Boland; [email protected]; @Hannaheboland
Copyright 2016 Alliance News Limited. All Rights Reserved.
Related Shares:
Obtala Resources Ltd