1st Dec 2016 17:43
LONDON (Alliance News) - African-focused agricultural and forestry company Obtala Ltd said Thursday that its majority-owned subsidiary Argento Ltd has received USD14.3 million in investment, with an additional USD5.0 million expected.
Obtala said the investment into Argento, in which it has a 75% stake, was made for 40,728 preference shares by private high net worth and institutional investors. The company said a further 14,286 preference shares in Argento have been 'soft-circled' for a further potential USD5.0 million investment.
Obtala also said that its existing investment vehicle Meradell will be unwound, with the majority of its financing structure to be converted into 15,308 preference shares in Argento. However, Global Timber Investments Ltd has opted to convert its holding in Meradell instead into 10.0 million new shares in Obtala, representing approximately 3.7% of Obtala's enlarged share capital.
Shares in Obtala closed up 0.2% at 17.54 pence Thursday.
The first USD10 million from the proceeds raised by the investment will be split 25% to Obtala and 75% to Argento, in order to purchase land and equipment for the forestry business in Mozambique. Further proceeds will go largely to Obtala for investment in its agricultural business in Tanzania to fund land clearance and irrigation, along with feasibility studies.
"The significant investment interest received for the Argento preference share offering validates our assessment of the deep value within Obtala's Forestry asset, a value this funding has unlocked for the benefit of shareholders," said Miles Pelham, chairman of Obtala.
"Monies received will accelerate the implementation of our plans to create an internationally recognized sustainable forestry business in Mozambique, allowing us to create a platform from which we can deliver a substantial shift in revenues. The success of the raise clearly demonstrates investor confidence in our new management team and rapidly evolving operating model," added Pelham.
By Adam Clark; [email protected]
Copyright 2016 Alliance News Limited. All Rights Reserved.
Related Shares:
Obtala Resources Ltd