30 Jul 2013 07:00
30 July 2013
AfriAg plc
("AfriAg" or the "Company")
AfriAg enters into sale and purchase agreement for investment in South African agri-logistics business
AfriAg (Pty) Ltd commences operations after securing key logistic contracts
AfriAg (AIM: AFRI), the AIM-listed agricultural value chain investing company, is pleased to announce that it has signed the sale and purchase agreement ("SPA") to acquire a 40% shareholding in South African company AfriAg (Pty) Ltd ("AfriAg SA"). This is the Company's first investment under its stated investment policy to invest into the growing African agriculture and logistics sector.
The board of the Company is also pleased to announce that AfriAg SA has now commenced operations and has already secured key logistics contracts for movement of perishable and frozen produce from within southern Africa and from southern Africa to Europe and Asia. AfriAg SA has also opened its new customised facility near Johannesburg's OR Tambo International Airport from where it operates its proprietary fleet of specialist refrigerated trucks. This facility is complemented by additional logistics capacity provided by a fully audited and compliant sub-contractor trucking network. AfriAg SA is working closely with a number of airlines and shipping agencies in Africa and Europe to provide a total logistics solution for its customers.
Key management contracts have already been secured and are operational. These include regular logistics movements of:
·; Frozen crocodile meat from one of Africa's largest commercial crocodile farms at Kariba by road and sea freight via Durban to Singapore.
·; Fresh flowers and bulbs from Zambia by road and sea freight via Durban to Rotterdam.
·; Fresh vegetables by road from Zimbabwe to Johannesburg and air freight to London.
AfriAg SA has also started working with South African-based Mar Group to transport perishable and other goods for one of South Africa's largest retailers from Johannesburg to Zambia. It is expected that this relationship will be further expanded upon in the near future.
As announced by the Company on 12 July 2013 the consideration payable by AfriAg for the investment is £1.326 million to be satisfied by way of an initial non-refundable cash consideration of £10,000 (which was paid by AfriAg on 15 July 2013 following signature of the term sheet) and the issue of 188,000,000 new ordinary shares of 0.1 pence each in AfriAg (the "Consideration Shares") to Mr Paul de Robillard, the beneficial owner of AfriAg SA.
Under South African law the SPA is required to be stamped by the South African regulatory authorities and it is expected that this process will be completed by mid-August. Once the required documentation has been stamped by the South African authorities there will be no further conditions to be fulfilled pursuant to the transaction save for admission of the Consideration Shares to trading on AIM ("Admission").
AfriAg SA has also adopted, with immediate effect, a Memorandum of Incorporation ("MOI") which will, inter alia, regulate the relationship between AfriAg, as a 40% shareholder in AfriAg SA on completion, and AfriAg SA. The MOI replaces the shareholder agreement which, as announced on 12 July 2013, was intended to be put in place with both parties at the same time as the SPA. The MOI contains the same key protections for AfriAg as the previously proposed shareholder agreement.
The Consideration Shares are to be issued to Cozinix (Pty) Ltd, a private company registered in the Republic of South Africa that is wholly owned by the de Robillard Trust and for which Paul de Robillard is the sole beneficiary. Following receipt of South African regulatory approvals application will be made for the Consideration Shares to be admitted to trading on AIM and the Consideration Shares will represent approximately 18.6% of the enlarged issued share capital of AfriAg upon Admission. The Consideration Shares, when issued, will rank pari passu with the existing ordinary shares of 0.1 pence each in AfriAg.
David Lenigas, Executive Chairman of AfriAg, commented:
"We are pleased with the speed that AfriAg SA has secured new key agri-logistics contracts, utilising its unique network of road, air and sea logistics providers. AfriAg's aim is to provide each customer with a bespoke "field-to-fork" service at the right value, the right time and at the right quality. We hope to be able to announce further new contracts over the coming weeks."
Further announcements will be made as appropriate.
For further information please contact:
AfriAg plc: +44 (0) 20 7440 0640
David Lenigas
Donald Strang
Nominated Adviser and Broker:
Allenby Capital Limited +44 (0) 20 3328 5656
Nick Naylor
Nick Athanas
Public Relations:
Square1 Consulting +44 (0) 20 7929 5599
David Bick
Notes to Editors:
AfriAg's vision for the future is to build a series of partnerships and alliances with specialist companies operating in agri-logistics throughout Africa to create the first truly pan-African agri-logistics conglomerate with offices and representative offices across Africa. We are confident that AfriAg SA is the first of many partnerships we will create throughout the continent. The aim is to provide each customer with a bespoke 'field-to-fork' service at the right value, at the right time and at the right quality.