Agriterra Ld Regulatory News (AGTA)

15 November 2023

Agriterra Limited ('Agriterra' or the 'Company')

Agriterra Limited / Ticker: AGTA / Index: AIM / Sector: Agriculture

New Term Loan and Related Party Transaction

Agriterra Limited, the AIM-quoted African agricultural company, is pleased to announce that it has concluded an unsecured US$1.7m term loan ("Term Loan") with Magister Investments Limited ("Magister"), its majority shareholder, which will:

· enable the group to replace the c. US$1.325m higher cost external finance from Standard Bank S.A.;

· facilitate the purchase in Mozambique by the Company's wholly owned subsidiary, Desenvolvemento E Comercializacao Agricola, Limitada ("DECA"), of various capital equipment which will be used in country to drive growth of the Company's biscuit plant operations through accessing new revenue streams; and

· provide the Company with US$150,000 of "head office" working capital.

The material terms of the Term Loan are as follows:

· Duration of 12 (twelve) months, with principal and interest (as described below) due at the end of the term, subject to extension if requested by the Company by a further 12 (twelve) months (on one or more occasions) by notice in writing provided by Magister to the Company at any time prior to the maturity.

· Interest will be charged on this facility at the rate of SOFR (at the start of each 12 (twelve) month period, if applicable) + 6% per annum (or part thereof, if applicable), on a daily basis, be compounded quarterly and paid in full on the maturity date.

· No arrangement fees are payable.

The Term Loan agreement contains customary conditions precedent, events of default, representations & warranties and covenants, including various negative pledges provided to Magister.

Related Party Transaction

Entering into the Term Loan constitutes a related party transaction under Rule 13 of AIM Rules. In this context, Caroline Havers, Neil Clayton and Sergio Zandamela (being the Directors on the Board who are considered to be independent of Magister) consider, having consulted with the Company's nominated adviser, Strand Hanson Limited, that the terms of the Term Loan are fair and reasonable insofar as its shareholders are concerned.

Caroline Havers, Non-Executive Chair, said: "The repayment of local bank borrowings in Mozambique will reduce the impact of the high interest rates charged by domestic banks. In addition, the financing of the acquisition of new capital equipment by DECA will support ongoing efforts to diversify our product and revenue streams as we seek to solidify our base operations. We thank Magister for its continued support in providing this new financing, which demonstrates its ongoing commitment to our business and shareholder base."