Anglo African Ag PLC Update on the Comarco transaction and COVID-19

 
TIDMAAAP 
 
The information contained within this announcement is deemed to constitute 
inside information as stipulated under the Market Abuse Regulations (EU) No. 
596/2014. Upon the publication of this announcement, this inside information is 
now considered to be in the public domain. 
 
11 May 2020 
 
                         Anglo African Agriculture Plc 
                           ("AAA" or the "Company") 
 
 
                Update on the Comarco transaction and COVID-19 
 
The Board of AAA today issues an update on its existing operations in the 
current Coronavirus environment and progress on the proposed Reverse Takeover 
of the Comarco group of companies (the "Comarco Transaction"). 
 
We are pleased to report that the Company's trading subsidiary, Dynamic 
Intertrade ("DI"), is fully operational despite the Coronavirus lockdown in 
South Africa.  As a food manufacturer DI is an essential manufacturer under 
South African regulations.  In addition, all staff working at DI have always 
kept to an extremely high standard of hygiene as dictated by FSSC requirements 
and worn masks and protective clothing ensuring safety of employees and 
products. Although DI is trading in a difficult environment it is still 
supplying to its major customers and production is continuing at a pace. It is 
expected, based on indicative orders, that for the six months ending 31 October 
2020, that revenues will be almost double the corresponding period in the 
previous year. One of the major customers recently issued a six-month 
production order amounting to some US$1m starting July this year. Although the 
indicative orders look positive, due to the uncertainties caused by the 
Coronavirus the company cannot give future guidance year on year. 
 
Progress with the Comarco Transaction has been protracted, mainly due to the 
general capital markets environment and the fact that many investment decisions 
have been put on hold until the effects of the Coronavirus are understood. 
 Comarco as a Port and Marine logistics operator is currently not materially 
affected by Coronavirus, however there is a slow down as with all trade 
worldwide. Activity on the Mozambique LNG project has also slowed down due to 
contractors not been able to travel and a general 30-day lockdown in 
Mozambique. 
 
The parties are in the process of documenting an extension of the longstop date 
to 31 August 2020. Given that the futures of both Comarco and AAA are closely 
related, it is the companies' shared belief that the current delay will not 
change the long-term outcome.  As announced on 31 December 2019, one option 
being evaluated is to accept investors at asset level in the Port and to then 
complete the RTO of Comarco group into AAA. The Company is also considering 
initiatives to jointly build a marine logistics division within AAA using an 
organic route with the help of Comarco.  This would allow us to grow AAA, give 
exposure to a high growth business and create more free cash flow. 
 
The $1million loan ("Loan") the Company advanced to Comarco will have a 
repayment value of approx. $1.3million (GBP1.1million) and is repayable on 12 
November 2020.  The Company has security to cover the Loan, being an option to 
acquire, for nominal consideration, the shares of Touchwood Investments 
Limited.  Touchwood's major asset is a 4.75 acre area of land at the Comarco 
port which Knight Frank in Kenya recently valued at $12million  The Company 
also received permission from the holder of the GBP250,000 convertible loan notes 
which AAA issued as part of that financing to defer the remaining interest into 
a capital repayment. 
 
The Company and its advisors are currently working on the above initiatives and 
will update the market in due course. 
 
The Board remains confident of the future for the Company despite the current 
global environment which is affecting so many companies. 
 
For further information, please visit www.aaaplc.com or www.comarcogroup.com 
contact the following: 
 
 
Anglo African Agriculture Plc 
 
David Lenigas, Non-Executive Chairman              [phone] 
Rob Scott, Executive Director                      [phone] 
 
 
Comarco Group                                      [phone] 
Simon Phillips (Chief Executive)                   [phone] 
Charlie Pettifer 
 
VSA Capital Limited (Financial Adviser and         [phone] 
Corporate Broker) 
 
Andrew Monk (Corporate Broking) 
Andrew Raca, Maciek Szymanski (Corporate Finance) 
 
 
 
END 
 

(END) Dow Jones Newswires

May 11, 2020 02:00 ET (06:00 GMT)