16th Jan 2020 17:25
(Alliance News) - Woodbois Ltd on Thursday said that it has taken certain measures to accelerate growth and move towards a positive cashflow position during 2020.
The Africa-focused forestry and timber trading company said it has secured a delay towards paying a deferred consideration due on the Woodbois acquisition. The company, previously known as Obtala Ltd, bought Woodbois International ApS and subsequently changed its name to Woodbois Ltd made in 2017.
The acquisition provided for deferred cash consideration of USD5.0 million, payable in equal quarterly payments over five years, commencing September 30, 2017.
Woodbois has agreed with the vendors, Zahid Abbas, Jacob Hansen and Hadi Ghossein to defer payments totalling USD1.3 million by a year, being the quarterly payments for the period from January 1 to December 31. Quarterly payments on the acquisition will resume on March 31, 2021.
Further, Woodbois has secured an additional USD1 million loan from shareholder 1798 Volantis Fund Ltd, a fund managed by Lombard Odier Asset Management. The new loan is on similar terms as the USD5.0 million already provided by Volantis.
Volantis and Woodbois Chief Executive Paul Dolan also agreed to receive Woodbois shares in lieu of interest for the period from July 1, 2019, to December 31, 2020, in respect of their loans.
In connection with the company's 4% convertible bonds 2024, issued in October 2019, Pelham Ltd, a company controlled by Miles Pelham, alongside Dolan have agreed to roll up interest payments due for the period from issue until December 31 on an aggregate USD20.4 million of bonds.
"The deferral by a year of the 2020 acquisition purchase payments by our senior management team is an important statement of support for, and confidence in, the fundamental strength of our business. I am grateful to the team, and also to our largest stakeholders for demonstrating their commitment to strengthening the company's working capital position. This will assist our ability to continue to pursue growth opportunities and maintain our proven trajectory of rapid growth," Dolan said.
Woodbois shares on Thursday closed at 5.80 pence each in London, down 3.3%.
By Tapan Panchal; [email protected]
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