28th Jul 2015 07:00
LEED RESOURCES PLC
("Leed" or "the Company")
Further Investment and Operational Update - High Mannor
Leed Resources plc, (AIM: LDP), the natural resource investment company, is pleased to announce that it has agreed to make a further investment of A$480,000 (approx. £230,000) in Battalion International Limited (“Battalion”), increasing its total investment in Battalion loan notes to A$1.68 million. The A$480,000 investment will be made through participation in a A$1.3 million increase in the convertible note issue of Battalion (the “Notes”). The new Notes will be issued on identical terms to the Notes referred to in the announcement of 8 January 2015 and will result in the total amount of Notes outstanding from Battalion increasing to A$4.55 million.
The increased financing will then be provided by Battalion to its subsidiary, High Mannor Pty. Limited (“HM”) through the issue of “back to back” convertible notes to support the further development of its business and, in particular, to enable HM to maximise the business opportunity from the introduction of the second generation reconstituted limestone wall panels into the Western Australian construction industry.
Operational Update
Leed is pleased to announce that the second batch of five moulds and twenty bases for making wall panels has been delivered to the HM quarry north of Perth. Following upgrading of production facilities and successful pre-testing of the moulds, the production of wall panels has now commenced. Currently it is anticipated that the first wall panels will be delivered and installed during August 2015. In addition to the contract extension referred to in the announcement dated 17 June 2015, HM has also recently received a significant new contract for which the panels will be ideally suited. Other contracts are currently under discussion and it is expected that the panels will be advantageous in enabling HM to secure further major contracts due to the significant advantages of the panels for its customers.
Following the recent Perth visit to HM, the Leed Directors consider it advantageous to provide further financing to enable HM to bring forward certain operational and capital improvements, as well as to strengthen its working capital position. This will ensure that HM is able to fully capitalise on the opportunity that is expected to follow the introduction of the panels. This initiative has also received the strong support of other major Battalion Note holders, including those closely associated with the Western Australian construction industry. If Leed and the other Note holders were to fully convert their Notes, Leed would hold 18.4% of Battalion and, whilst the Notes are outstanding, the quarterly coupon receivable by Leed will increase to A$50,400 (approximately £24,150). Battalion currently has a 61% interest in the equity of HM and, in the event that Battalion converted all of the loan notes it owns in HM (including the A$1.3m increase), it is expected that it’s interest would rise to approximately 76% % of HM.
Ian Gibbs, Chairman of Leed, said “The successful production of panels from the first batch of moulds, and the recent delivery of the second batch of moulds and bases, means that the commencement of panel deliveries into the market is now imminent. We are pleased to have an agreement to increase our holding through the new funding and note the continued strong support of our partners, through their participation in the financing, which was oversubscribed. We are entering a very exciting period for High Mannor and look forward to updating the market further once the first wall panels have been delivered.”
About Battalion
Battalion is the controlling shareholder of High Mannor Pty. Limited (“HM”) which trades under the brand name of “Cultural Limestone”. HM is an integrated limestone quarrying business which extracts limestone from a quarry just north of Perth in Western Australia. The limestone is then crushed and processed into reconstituted limestone blocks which are used in the construction industry. HM is the developer and owner of a patented technology which produces reconstituted limestone walls panels that provide substantial cost and efficiency benefits compared to the individual limestone blocks produced by its competitors.
| For further information, please contact: Leed Resources plc | |||
| Ian Gibbs | Tel: +65 6372 3575 | ||
| Charles Zorab | Tel: +44 203 405 4214 | ||
| Nomad and Broker | |||
| SP Angel Corporate Finance LLP | |||
| Ewan Leggat/Katy Birkin | Tel: +44 20 3470 0470 | ||
View source version on businesswire.com: http://www.businesswire.com/news/home/20150727005735/en/
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