PME African Infrastructure Opps PLC Loan Agreement (2533Y)

TIDMPMEA

RNS Number : 2533Y

PME African Infrastructure Opps PLC

07 May 2019

7 May 2019

PME African Infrastructure Opportunities plc

("PME" or the "Company" and together with its subsidiaries the "Group")

(AIM: PMEA.L)

Loan Agreement

PME African Infrastructure Opportunities plc announces that it has entered into a secured loan agreement with Optas GmbH (the "Lender"), pursuant to which the Lender has conditionally agreed to make up to EUR400,000 available to the Company for the Company's general working capital purposes (the "Loan").

As required by local regulation, the Group has been working with its local bank to have an existing intercompany loan between PME Properties Limited and PME TZ Property (Mauritius) Limited, both wholly owned subsidiaries of the Company, registered with the Bank of Tanzania. Whilst the Board expects this process to conclude satisfactorily, this registration process has proven time consuming and is currently being transferred to a number of departments within the Bank of Tanzania.

The Company has been advised that, prior to the registration of the existing intercompany loan being completed, the Group is currently not able to pass funds through the Group and outside of Tanzania. Notwithstanding the fact that the Company's sole remaining investment, a leasehold building in Dar-es-Salaam, Tanzania, continues to trade profitably and to generate cash capable of meeting the Group's working capital requirements, the Company had unaudited cash balances of approximately US$21,000 as at 31 March 2019 and future delays in the Group's ability to upstream funding to the Company could result in a lack of working capital at the PME holding company level.

To provide the Company with additional certainty in the event of a continued restriction in the Company's ability to upstream funds out of Tanzania to the Company, the Company has entered into the Loan with the Lender.

The Loan is secured on the Company's cash receivables, is repayable at par together with accrued interest on 3 November 2020 and is available to be drawn down by the Company in one or more loans. Drawn amounts under the Loan will carry an interest rate of 6% per annum, whilst undrawn amounts under the Loan will carry an interest rate of 1% per annum. There are no arrangement fees payable by the Group to the Lender in connection with the Loan. The Loan is conditional on the Company's Isle of Man bank acknowledging a notice of security over the Company's cash receivables.

The Company currently expects that it will typically draw down the Loan at a rate of approximately EUR40,000 to EUR65,000 per calendar month.

Related Party Transaction

Paul Macdonald, a director of the Company, is interested in 40% of the Lender's issued share capital. Under the AIM Rules for Companies (the "AIM Rules"), the Lender is, therefore, deemed to be a related party of the Company and the Loan is a related party transaction pursuant to Rule 13 of the AIM Rules. The independent director of PME, Lawrence Kearns, considers, having consulted with the Company's nominated adviser, that the terms of the Loan are fair and reasonable insofar as the shareholders of PME are concerned.

For further information please contact:

 
 
   Cenkos Securities plc 
   Nominated Adviser 
   Azhic Basirov / Ben Jeynes        [phone] 
 Stifel Nicolaus Europe Limited 
  Broker 
  Neil Winward / Tom Yeadon        [phone] 
 

The information communicated within this announcement was deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 prior to the release of this announcement. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

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May 07, 2019 08:37 ET (12:37 GMT)