Afriag Global Regulatory News (AFRI)

25 January 2016

AfriAg PLC

("AfriAg" or the "Company")

Proposed Cancellation of Trading on AIM to focus on the ISDX Growth Market and Notice of GM

AfriAg Plc (AIM: AFRI and ISDX: AFRI) has today posted a circular to Shareholders convening a general meeting, to be held at 200 Strand, at 4:00pm on 16 February 2016. The circular contains proposals to cancel the admission of the Company's Ordinary Shares to trading on AIM under AIM Rule 41. If Shareholder approval is granted, it is expected that delisting will take place on or around 24 February 2016.

1 Rationale for the Cancellation

The Directors have been reviewing the merits or otherwise of the Ordinary Shares continuing to trade on AIM. The following factors were taken into account during their review:

· the Company's Ordinary Shares were dual listed by their admission to trading on the ISDX Growth Market on 9 October 2015;

· the Board have determined that in their view and given the size and stage of development of the Company that the ISDX Growth Market provides Shareholders with the most appropriate listing platform on which to promote the Company's growth;

· the ISDX Growth Market provides Shareholders with a similar trading facility to that offered by AIM and following Cancellation Shareholders will be able to continue trading their Ordinary Shares in the Company without interruption;

· the Board have noted that in the three months that the Ordinary Shares have been dual listed on AIM there has been an increasing volume of the number of Ordinary Shares traded using ISDX; and

· the Board estimates that the cost savings of approximately £30,000 to £40,000 per annum will result by cancelling a listing on AIM.

2 Strategy following the Cancellation

The Company's strategy following Cancellation will remain exactly the same as it was prior to the Cancellation save that the Ordinary Shares will only be traded on the ISDX Growth Market.

The Company's investing policy following the Cancellation will therefore continue to be as adopted by Shareholders on 24 April 2013 as set out in paragraph 3 below.

3 Investing Policy

It is the intention of the Directors that the operations of the Company will continue in the same form with the objective of expanding its investments and operations in Southern Africa. The Directors are also considering various strategic options for the further development of the Company following the Cancellation, details of which will be provided to Shareholders directly.

The Directors intend to seek to acquire a direct and/or an indirect interest in businesses involved in agriculture generally and the production, processing, logistics and distribution of agricultural produce.

The Company will initially focus on opportunities in Europe, Africa and the Middle East but will consider possible opportunities anywhere in the world.

The Company may invest by way of purchasing quoted shares in appropriate companies, outright acquisition or by the acquisition of assets, including the intellectual property, of a relevant business, or by entering into partnerships or joint venture arrangements. Such investments may result in the Company acquiring the whole or part of a company (which in the case of an investment in a company may be private or listed on a stock exchange, and which may be pre-revenue), and such investments may constitute a minority stake in the company, partnership and/or joint venture in question. The Company will not have a separate investment manager.

The Company may be both an active and a passive investor depending on the nature of the individual investments. Although the Company intends to be a medium to long-term investor, the Directors will place no minimum or maximum limit on the length of time that any investment may be held and therefore shorter term disposal of any investments cannot be ruled out.

There will be no limit on the number of businesses into which the Company may invest, and the Company's financial resources may be invested in a number of propositions or in just one investment, which may be deemed to be a reverse takeover pursuant to the ISDX Rules. The Company will carry out an appropriate due diligence exercise on all potential investments and, where appropriate, with professional advisers assisting as required. The Board's principal focus will be on achieving capital growth for Shareholders.

Investments may be in all types of assets and there will be no investment restrictions. The Company may require additional funding as investments are made and new opportunities arise. The Directors may offer new Ordinary Shares by way of consideration as well as cash, thereby helping to preserve the Company's cash resources for working capital. The Company may in appropriate circumstances, issue debt securities or otherwise borrow money to complete an investment. The Directors do not intend to acquire any cross-holdings in other corporate entities that have an interest in the Ordinary Shares.

4 Corporate Governance Following Cancellation

The Company and the Board will continue to operate the same corporate governance procedures that it did prior to the Cancellation.

Whilst the Company is not required to comply with the provisions of the Governance Code or the Corporate Governance Code for Small and Mid-Size Quoted Companies 2013 published by the Quoted Companies Alliance the Board recognises the importance of sound corporate governance. The Board intends that the Company will comply with the provisions of the Governance Code and the QCA Guidelines insofar as they are appropriate given the Company's size and stage of development. The Board of Directors comprises two executive directors. The executive directors, being Hamish Harris and Donald Strang, are not considered to be independent.

The Board is aware that it is not compliant with the QCA Guidelines or the Governance Code or the ISDX Rules in respect of having at least one independent non-executive Director. It is the Board's intention that, as soon as practicable, an independent non-executive director will be appointed to the Board.

5 Process for Cancellation

In accordance with Rule 41 of the AIM Rules and subject to Shareholder approval, the Company has notified the London Stock Exchange of the Cancellation, giving at least twenty business days' notice. Under the AIM Rules, it is a requirement that the Cancellation is approved by the requisite majority of Shareholders voting at the General Meeting (being not less than 75 per cent. of the votes cast). Accordingly, the Resolution set out in the Notice of General Meeting seeks Shareholders' approval to the Cancellation. Subject to the Resolution being passed at the General Meeting, it is anticipated that trading in the Ordinary Shares on AIM will cease at close of business on 23 February 2016 with the Cancellation taking effect at 7.00 a.m. on 24 February 2016.

The Company has received irrevocable undertakings to vote in favour of the Resolution from both Directors holding 40 million Ordinary Shares each, representing, in aggregate, approximately 5.8 per cent. of the total voting rights of the Company.

Upon the Cancellation becoming effective, Cairn Financial Advisers LLP will cease to be nominated adviser under the AIM Rules to the Company and the Company will no longer be required to comply with the AIM Rules.

6 Effect of the Cancellation on Shareholders

If approved by Shareholders, the principal effects of the Cancellation will be:

· the Ordinary Shares will no longer admitted to trading on AIM

· if Shareholders wish to trade their Ordinary Shares then they will only be able to do so on the ISDX Growth Market.

7 Expected Timetable of Principal Events

All of the times referred to in this document refer to London time unless otherwise stated.

Dates set against events that are expected to occur after the expected date of the General Meeting assume that the General Meeting is not adjourned and that the Resolution is passed at the General Meeting.

All of these times and dates are subject to change at the Company's discretion. In the event of any change, the revised times and dates will be notified to Shareholders by an announcement through a Regulatory Information Service.

Defined terms in this announcement have the same meaning as set out in the circular posted to Shareholders which is available on the Company's website, at www.afriag.com.

- Ends -

For further information, please contact:

AfriAg plc: +44 (0) 20 7440 0640

Hamish Harris/Donald Strang

Nominated Adviser and Broker:

Cairn Financial Advisers LLP +44 (0) 20 7148 7900

James Caithie/Jo Turner

Public Relations:

Square1 Consulting +44 (0) 20 7929 5599

David Bick/Brian Alexander