LONDON (Alliance News) - Obtala Resources Ltd Thursday said it will propose changing the company's name at the forthcoming annual general meeting in order to better reflect the business and to ensure there are no misunderstandings about its strategy.
The London-listed company wants to shorten its name to Obtala Ltd as it attempts to drop 'Resources' from its title, a popular term used by mining companies. Shareholders will have to approve the proposal at the AGM, the date of which has not yet been set.
"As the company cements its medium-term plans around our two core business lines of agriculture and forestry it is important that we avoid any confusion regarding our strategy," said Chairman Miles Pelham.
"By removing 'Resources' from the company name we avoid any misunderstanding regarding our core business lines thereby allowing present and future stakeholders to correctly identify our strategy," he added.
Pelham said approval from shareholders would allow the company to refocus its energy onto dialogue with the investment community and would also be followed by a "complete overhaul" of the company website.
Obtala is attempting to build a vertically integrated business in Africa, initially based around Sub-Saharan Africa, and currently has a diverse portfolio of projects located in Tanzania, Mozambique and Lesotho.
The company has a farming business in Tanzania producing a variety of horticulture products, which ties into the company's food processing operations in the country and its 'Mama Jo's' brand of foods, including fruit, dried fruit and other fresh produce.
Slightly away from those parts of the business, Obtala also has a timber and forestry business based in northern Mozambique, where it hopes to profit from the natural hardwood species of trees in the region.
Obtala considered spinning off its timber business in Mozambique last year but then "delayed" the move after securing a USD3.0 million investment into the forestry unit back in February.
Obtala outlined a new strategy for the business back in April when it provided financial guidance for its units covering the next four to five years, which included a commitment to return between 5.0% to 20.0% of the funds generated by the group to shareholders - but that is not a priority and is unlikely to emerge in the near term.
Obtala feels more confident about the sustainable levels of revenue it can generate after transitioning from an asset building strategy to one based around increasing production and profitability, but the company said any guidance is subject to change based on market conditions.
Obtala shares were down 2.7% to 8.27 pence per share on Thursday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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