Anglo African Ag PLC Update on the Proposed Reverse Takeover

 
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. 
 
23 September 2020 
 
                         Anglo African Agriculture plc 
 
                           ("AAA" or the "Company") 
 
 
                    Update on the Proposed Reverse Takeover 
 
The Company is providing an update on the proposed acquisition of the Comarco 
group of companies (the "Comarco Group") and the associated fundraising. The 
Comarco Group is based in Mombasa, Kenya and is engaged in port and marine 
logistics activities in East Africa. 
 
AAA has been working with the management of the Comarco Group for over two 
years, assisting on the group's operational restructuring and strategic 
positioning for growth. On 12 November 2018, the Board of AAA announced that a 
$1 million loan was advanced to provide general working capital to Comarco 
Group (the "Port Loan"). The Port Loan was provided as part of AAA's assistance 
to restructure the Comarco Group. The Port Loan is repayable in November 2020 
and is currently accruing interest at 15%. The sum repayable under the Port 
Loan would be approximately $1.3mn (c.GBP1mn). 
 
On 9 June 2019, AAA signed conditional share purchase agreements (the "SPAs") 
to acquire the entire share capital of a number of the Comarco Group companies 
(the "Proposed Acquisition"). The SPA's were extended until 31 August 2020. 
 
The Board of AAA continue to believe that completing the RTO is in the best 
interests of both AAA shareholders and Comarco shareholders. There have been 
significant ongoing efforts continuing to be made to finalise funding. However, 
COVID pandemic and the associated government restrictions on travel have 
prevented site visits and progress being made. The Board of AAA and Comarco 
have been discussing terms of a new extension of the SPAs linked to an 
extension of the Port Loan but have decided that it is not critical to agree to 
new terms as both groups are intrinsically tied by the transaction. From an AAA 
perspective, the November repayment date for the loan is far more critical. 
 
In the event that an extension to the loan agreement is not finalised and the 
Port Loan is not repaid, AAA has an option to acquire for a nominal sum the 
entire share capital of Touchwood Investments Limited. Touchwood Investment 
Limited's major asset is a 4.74-acre area of land within the Comarco port. The 
Board believes that this option would be worth considerably more than the 
$1.3mn Port Loan itself. 
 
In the meantime, the Comarco Port is seeing a pick-up in demand as anticipated, 
principally due to the commencement of operations for the Mozambique LNG 
project. 
 
Despite an initial estimation that the Dynamic Intertrade ("DI") revenue will 
be ahead year on year, liquidity issues in South Africa have delayed such 
revenue. Major South African creditors in the last month, due to the uncertain 
economic future, have been rapidly reducing their loan and trade finance 
books.  As a result, the magnitude of increase in revenue will be lower than 
previously estimated. Despite difficult conditions, DI has maintained full 
operations during this time. Management are looking at alternative local 
funding sources to ameliorate this and are hopeful as this would allow revenue 
to increase in line with expectations. 
 
For further information, please visit www.aaaplc.com or www.comarcogroup.com 
contact the following: 
 
 
Anglo African Agriculture plc 
 
David Lenigas, Non-Executive       [phone] 
Chairman                           0640 
Rob Scott, Executive Director      [phone] 
 
 
Comarco Group                      [phone] 
Simon Phillips (Chief Executive)   [phone] 
Charlie Pettifer 
 
VSA Capital Limited (Financial     [phone] 
Adviser and Corporate Broker) 
 
Andrew Monk (Corporate Broking) 
Andrew Raca, Maciek Szymanski 
(Corporate Finance) 
 
 
 
END 
 

(END) Dow Jones Newswires

September 23, 2020 02:00 ET (06:00 GMT)