Forestry Update

RNS Number : 0070J

Obtala Limited

06 September 2016

 

06 Sept 2016

Obtala Limited

("Obtala", the "Group" or the "Company")

(AIM: OBT)

Forestry Update

Highlights

·     US$1.1 million investment in the forestry division

·     Investment by five independent HNW investors and Chairman

·     US$900,000 investment received, balance due within 30 days

Obtala Limited, the African focused agricultural and forestry company, is pleased to announce that it has entered into separate agreements with five High Net Worth ("HNW") investors and the Chairman of Obtala, Miles Pelham, for an inward investment of US$1.1 million into the existing Meradell (2) Ltd investment vehicle, as announced on 17 February 2016 and amended as per the 29 June 2016 announcement.

Miles Pelham, Chairman of Obtala, will invest US$500,000 into Meradell (2) Limited thereby acquiring economic benefit of 1,429 hectares via a 2.86% shareholding in Meradell (2) Limited, bringing his total holding to 2,143 hectares via a 4.29% shareholding in Meradell (2) Limited. The Chairman's investment was approved by the independent directors (excluding Miles Pelham), and the terms of the transaction considered to be fair and reasonable.

Five HNW investors will invest US$600,000 into Meradell (2) Limited thereby acquiring a combined economic benefit of 2,002 hectares via a 4.00% shareholding in Meradell (2) Limited. 

On 28^th June 2017 each investor in this tranche has the right to put the investment back to Obtala for the nominal amount invested, payable either in cash or the then equivalent value of Obtala shares at Obtala's election. As under previous agreements, investors will receive a 5% fixed return on their aggregate investment, payable biannually and a pro-rata share of any profit at subsidiary level.

The Company remains committed to raising funds for expansion by further sales of the Meradell structure and/or other forestry linked investment vehicles such as preferred equity in Argento, Obtala's 75% owned forestry subsidiary.

Obtala Resources Miles Pelham - Chairman Paul Dolan - CEO www.obtala.com	[phone]
ZAI Corporate Finance Limited (Nomad)                 Ray Zimmerman/ Peter Trevelyan-Clark / Jamie Spotswood	[phone]
Brandon Hill Capital  (Broker)      Jonathan Evans	[phone]

 

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