(Alliance News) - Danakali Ltd on Tuesday said it has secured a AUD74 million, around GBP38.9 million, equity investment from Africa Finance Corp to part fund the development of the Colluli Sulphate of Potash Project located in Eritrea, east Africa.
The Sydney and London-listed potash explorer said it has entered into a subscription agreement with Africa Finance for issuing new shares.
The share placement will be undertaken in two tranches. The first tranche will consist of 53 million new Danakali shares at an issue price of AUD0.60 per share to raise AUD31.8 million. The second tranche, which is subject to Danakali shareholder approval and execution of senior debt documentation, will consist of 70 million new shares at the same issue price to raise the remaining AUD42.0 million.
The AUD0.60 per share issue price represents a 6% discount to Danakali's Monday's closing price of AUD0.64 in Sydney. Danakali shares in London on Tuesday were untraded at 35.50 pence each.
Following the investment, Africa Finance will own a 32% stake in Danakali. The development finance provider will also be granted a right to nominate up to two directors to Danakali's board.
Danakali Chief Executive Niels Wage said: "I am very pleased to have secured AFC as a strategic equity investment partner. Danakali has made good progress over the past 12 months having secured a large proportion of the development capex for Module I and demonstrated a sustainable approach to the future development of Colluli. We are excited to commence project execution activities and look forward to providing updates to our shareholders and other stakeholders."
By Ife Taiwo; ifetaiwo@alliancenews.com
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