RE: RNS out23 Apr 2019 22:28
FYI gkb- it's all here! The Transaction
The Company has concluded a contract with, as parties, Southern African Trade Finance Ltd (SATF), a company registered in the British Virgin Islands, as the purchaser, and SSGI: and a second contract with, as parties, SATF, SSGI and Canape Investments (pvt) Ltd (Canape) the Company’s wholly owned Zimbabwean subsidiary, the combined effect of which is to assign the Group’s 50.01% interest in Ronquil to SATF. SSGI is a party to the contract as a ‘Confirming Party’ as it has a security interest pursuant to the SSGI Loan, and also is the parent company of the owner of the other 49.99% interest in Ronquil; but otherwise has no material interest in or benefit from the Transaction. The key terms of the combined contracts are as follows:
The consideration from SATF is US$2.5 million payable outside Zimbabwe plus *RTGS$2.5 million (being US$1 million) payable in Zimbabwe.
The US$2.5 million payable externally will be applied in part repayment of US$2.5 million of the SSGI Loan.
The RTGS$2.5 million payable in Zimbabwe will be retained by SSGI as security until the SSGI Loan is repaid in full but if remitted from Zimbabwe may be applied in further repayment of the SSGI Loan.
SSGI has assigned back to the Company a loan due from Canape of US$3,168,059 value dated at 31 December 2016. This loan was equitably assigned to SSGI as part of a larger transaction pursuant to the agreements with SSGI announced on 30 January 2017 in connection with the acquisition by SSGI and its subsidiary of a 49.99% interest in Ronquil.
As a condition precedent that the Transaction must be approved by the Company’s Shareholders at a General Meeting no later than 23 April 2019.
* RTGS is the new currency introduced in Zimbabwe in February 2019. On the date that RTGS was introduced all internal US$ balances in Zimbabwe became RTGS$ balances on a 1:1 basis. However, at the same time a market rate of US$1 = RTGS$2.5 was established.
Disposal of Canape
After completion of the Transaction, Canape will have no material assets apart from RTGS$2.5 million which will remain charged to SSGI until the SSGI Loan is fully repaid. It will owe on loan account US$18,012,050 to the Company and US$11,669,995 due to SSGI, all value dated 31 December 2016 (together the Historic Loans). Neither principal nor interest is payable on the Historic Loans unless and until Canape has the ability to pay. If repaid they must be repaid pro rata save that the first RTGS$2.5 million may be repaid to the Company in priority.
In practical terms, there is no likelihood that the Historic Loans or interest thereon will ever become payable, however the liability to SSGI will remain on the Company’s consolidated Balance Sheet whilst Canape remains a subsidiary of the Company. In order to resolve this matter on the Company’s Balance Sheet, the Company is proposing that after the Transaction is completed the shares of Canape will be transferred to a t
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