China Food Company PLC Subscription of Convertible Loan Notes (3643N)

TIDMCFC

RNS Number : 3643N

China Food Company PLC

06 September 2013

 
     Press Release       6 September 2013 
 

China Food Company Plc

("China Food", "Group" or the "Company")

Subscription of Convertible Loan Notes and

Conversion of Unsecured Debt into Loan Notes

China Food Company Plc (AIM:CFC), a leading Chinese manufacturer of cooking and dipping sauces, announces it has raised GBP850,000 before expenses through a subscription of 850 Convertible Loan Notes of GBP1,000 each ("Loan Notes") by existing and new investors (the "Subscription"). This follows the Company's recent appointment of PwC to manage the potential sale of the Group's animal feed production business, Fuss Feed (Weifang) Co., Ltd, which it is anticipated will be completed in summer 2014. The Loan Notes subscribed for today will provide interim support until the sale of the animal feed business is completed and the funds from this disposal are received.

The Loan Notes subscribed for are A Loan Notes and all Loan Notes may be converted at any time up to maturity at a price of 15.5 pence at the option of the Loan Note Holder. Interest will be charged at a rate of 17.5 per cent per annum until 30 September 2013; 20 per cent per annum from 1 October to 31 December 2013 and 25 per cent per annum thereafter until redemption. A redemption premium of 1 per cent of the Loan Note holder's original holding will be payable on redemption.

The Loan Note holders retain the right not to redeem their holding until maturity of the Loan Notes on 3 November 2014, in which case the interest rate will be fixed at the rate prevailing on the date of the Company's proposed redemption. In the event the Company is unable to transfer funds from the PRC to pay interest when due, the Loan Note holders have agreed that interest charged will be rolled up and compounded semi-annually to maturity.

Conversion of unsecured debt into Loan Notes

At the same time as the Subscription, a number of parties will be converting existing unsecured debt owed to them by the Company into a total of 390 A Loan Notes and 75 B Loan Notes (the "Conversion"). These parties include three directors:

 
     Director                  Number of A Loan Notes            Total Loan Notes 
                                             received        held post Conversion 
------------------------  ---------------------------  -------------------------- 
     John McLean                                  175                         225 
     Raphael Tham                                 175                         175 
     Clifford Halvorsen                            40                          40 
 

In accordance with the AIM Rules for Companies the Conversion by the directors is a related party transaction. The Independent Directors, having consulted with the Company's Nominated Adviser, finnCap Limited, consider that the Conversion by directors is fair and reasonable insofar as the Company's shareholders are concerned.

The Company has applied to ISDX for the newly issued 1,240 A Loan Notes to be admitted to trading ("Admission"). Admission is expected to occur on 11 September 2013. Following the Subscription and the Conversion, there is a total of 5,694 Loan Notes in issue, totaling GBP5.69 million.

Commenting on the Subscription, John McLean, Chairman of China Food Company plc, said: "The Board is pleased that investors have continued to support the Company through this exciting period and we look forward to repaying this support over the coming year following the sale of our Fuss Feed subsidiary. Our advisers have expressed their confidence at being able to find a suitable buyer at the right price and we look forward to updating the market in due course."

- Ends -

For further information:

 
      China Food Company Plc 
      John McLean, Chairman        Tel: [phone] 
                                    www.chinafoodcompany.com 
 
 
      finnCap 
      Geoff Nash / Ben Thompson (Corporate       Tel: [phone] 
       Finance)                                                  0500 
      Simon Starr (Broking) 
 
 
      Numis Securities 
      David Poutney (Joint Broker)       Tel: [phone] 
                                                         1000 
 

Media enquiries:

 
      Abchurch Communications 
      Henry Harrison-Topham / Joanne Shears         Tel: [phone] 
                                                                    7702 
      [e-mail]                 www.abchurch-group.com 
 

This information is provided by RNS

The company news service from the London Stock Exchange

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