CHOC.L Regulatory News (CHOC)

27 October 2015

United Cacao Limited SEZC

("United Cacao" or the "Company")

Completion of Convertible Bond Issue and Equity Placing

United Cacao Limited SEZC (AIM: CHOC), the AIM-quoted cacao plantation company based in Peru, is pleased to announce that the Company has secured commitments to subscribe for $6,080,000 of the 7.00 per cent secured convertible bonds, with a maturity date of 30 June 2019 (the "Bonds") (the "Bond Issue"). The Bonds will be admitted shortly to trading on the ISDX Growth Market.

The Company also announces that it has completed an equity placing in Peru to new institutional and family office investors to raise $1,280,000 before expenses (the "Equity Placing"). Mr. Dennis Melka, the Company's Chairman and Chief Executive Officer, has also participated in the Equity Placing.

The net proceeds of the Bond Issue, in conjunction with the Company's existing cash resources (including that cash received from the Equity Placing), will be used to finance additional planting of the Company's owned plantation estate, to part fund the roll-out of the PAPEC programme and for general working capital purposes.

The Bond Issue

Overview

The Company is proposing to raise up to $10,000,000 (approximately £6,530,000) gross through the issue of up to 10,000,000 million secured convertible bonds of denomination $1.00, with a maturity date of 30 June 2019. The Bonds bear interest at the rate of 7.00 per cent per annum, payable semi-annually in arrears.

As at the date of this announcement, the Company has secured commitments for $6,080,000 of the total $10,000,000 fundraising from new and existing investors ("Tranche One"), including commitments from the Company's Executive Chairman and CEO, Dennis Nicholas Melka, to subscribe for $1,075,000 and from Non-Executive Director, Constantine Gonticas, to subscribe for $200,000.

The Company and Mr. Melka have also entered into a call option arrangement pursuant to which the Directors (other than Mr. Melka) (the "Independent Directors") may call upon Mr. Melka to subscribe for up to a further $2,000,000 of the Bonds (the "Call Option") ("Tranche Two").

At maturity, Bondholders may choose to either convert the outstanding principal of the Bonds into Ordinary Shares at a conversion price of US$3.40 per share (approximately 222p) or to redeem in cash. At maturity, the maximum amount of Ordinary Shares that may be issued under Tranche One, assuming full conversion to equity, is 1,788,235.

The Bond Issue is conditional on, inter alia, admission to trading of the Bonds on the ISDX Growth Market having occurred by 30 November 2015 for Tranche One and 14 July 2016 for Tranche Two, should the Call Option be exercised by the Independent Directors.

Further Information on the Bond Issue

An information memorandum has been prepared in connection with the admission of the Bonds to the ISDX Growth Market (the "IM"). The IM sets out in detail, inter alia, the terms and conditions of the Bond Issue. Copies of the IM will be available free of charge during usual business hours on any weekday (public holidays excepted) at the offices of Strand Hanson Limited at 26 Mount Row, London W1K 3SQ and on the Company's website: www.unitedcacao.com

The IM references the AIM Admission Document prepared in connection with the Company's admission to trading on AIM in December 2014 which is also available on the Company's website.

Pursuant to Appendix 2 of the ISDX Rules, the Company is also required to release an admission application announcement via a Regulatory Information Service. This announcement is also released on the ISDX website. The contents of this announcement are set out at the end of this announcement for reference.

For the avoidance of doubt, the Ordinary Shares, which currently trade and will continue to trade on AIM, will not also be admitted to trading on the ISDX Growth Market. The Bonds and the Ordinary Shares are both eligible for CREST settlement.

The Equity Placing

Overview

The Company has successfully completed an equity placing with new investors in Peru to raise $1,280,000 million before expenses through the placing of 474,074 new ordinary shares of US$0.001 each (the "Ordinary Shares") at a placing price of US$2.70 (approximately 176 pence) per Ordinary Share (the "Placing Price") (the "Placing Shares").

The Placing Price represents a discount of approximately 7.4 per cent. to the closing middle market price of 190 pence per Ordinary Share on 26 October 2015, being the last business day prior to the announcement of the Equity Placing and a 35 per cent premia to the Company's price per share at Admission on 2 December 2014.

The Placing Shares will be fully paid and will rank pari passu in all respects with the existing Ordinary Shares.

Dennis Melka has subscribed for 4,074 Ordinary Shares in the Equity Placing. Following the Equity Placing, Mr Melka is directly and indirectly interested in 5,234,821 Ordinary Shares representing 27.46 per cent. of the Company's currently issued share capital.

Related Party Transaction

The subscriptions by Mr. Melka and Mr. Gonticas as part of Tranche One, the entering into the Call Option with Mr. Melka and Mr. Melka's participation in the Equity Placing are considered related party transactions under the AIM Rules. The Independent Directors consider, having consulted with Strand Hanson Limited, the Company's nominated adviser, that the terms of the transaction are fair and reasonable insofar as the Company's shareholders are concerned.

Admission to Trading and Total Voting Rights

Application has been made to the London Stock Exchange for admission of the Placing Shares to trading on AIM ("Admission") and it is expected that Admission will take place and that trading will commence on AIM on or around 2 November 2015. Following Admission and the above-mentioned option exercise, the Company will have 19,064,074 Ordinary Shares in issue with each share carrying the right to one vote.

The Company has no Ordinary Shares held in treasury. The total number of voting rights in the Company following Admission will therefore be 19,064,074. This figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FCA's Disclosure and Transparency Rules.

Dennis Melka, Executive Chairman & CEO, commented:

 "We are delighted at the success of the capital raising which allows the Company to continue its aggressive planting programme and roll-out of its small farmer initiative. The Company seeks to be the world's largest and lowest cost producer of cacao when the planting of its owned estates is completed in 2017. Whilst global chocolate confectionary sales continue to increase, the cacao market remains in tight supply and based on recent news reports, all three main producing countries, Cote d'Ivoire, Ghana and Indonesia, are in a state of supply contraction."

Ricardo Carrion, Managing Director of Kallpa Securities SAB, commented:

"The local market equity placing managed by Kallpa is a milestone event for United Cacao in that it includes the Company's first Latin American institutional investors. This is an important step in improving CHOC's liquidity on the Lima stock exchange and bringing more local investors into the registry. Peru has a clear global cost and productivity advantage in the production of cacao and excellent low-cost export logistics to move the dried, fermented beans to confectionary buyers in Asia, North America or Europe. United Cacao is well-positioned to benefit from the dual trends of continually rising global chocolate sales and diminishing bean supply from West Africa and Asia."

For further information on the Company, please visit www.unitedcacao.com or contact:

ISDX Rules Appendix 2 admission application announcement:

Admission Application Announcement

The Directors of UCL (AIM: CHOC) are pleased to announce that the Company has applied for the admission of its secured convertible bonds due 30 June 2019 (the "Bonds") to the ISDX Growth Market (the "Bond Issue").

Overview of the Bond Issue

The Company is proposing to raise up to $10,000,000 (approximately £6,530,000) gross through the issue of up to 10,000,000 secured convertible bonds of denomination $1.00, with a maturity date of 30 June 2019. The Bonds bear interest at the rate of 7.00 per cent per annum, payable semi-annually in arrears.

As at the date of this announcement, the Company has secured commitments for $6,080,000 from new and existing investors ("Tranche One"), including commitments from the Company's Executive Chairman and CEO, Dennis Nicholas Melka, to subscribe for $1,075,000 and from Non-Executive Director, Constantine Gonticas, to subscribe for $200,000. It is expected that admission of Tranche One to the ISDX Growth Market will take place on or about 9 November 2015.

The Company and Mr. Melka have also entered into a call option arrangement pursuant to which the Directors (other than Mr. Melka) (the "Independent Directors") may call upon Mr. Melka to subscribe for up to a further $2,000,000 of the Bonds (the "Call Option") ("Tranche Two").

At maturity, Bondholders may choose to either convert the outstanding principal of the Bonds into Ordinary Shares at a conversion price of US$3.40 per share (approximately 222 pence), or to redeem in cash. The maximum amount of Ordinary Shares that may be issued under Tranche One is 1,788,235.

The Bond Issue is conditional on, inter alia, admission to trading of the Bonds on the ISDX Growth Market having occurred by 30 November 2015 for Tranche One and 14 July 2016 for Tranche Two, should the Call Option be exercised by the Independent Directors.

The net proceeds of the Bond Issue, in conjunction with the Company's existing cash resources, will be used to finance additional planting of the Company's owned plantation estate, to part fund the roll-out of the PAPEC programme and for general working capital purposes.

Company Information

UCL is an exempted company incorporated in the Cayman Islands, registered as a special economic zone company and licensed by the Special Economic Zone Authority of the Cayman Islands. UCL is the holding company for two wholly-owned Peruvian subsidiaries, Cacao del Peru Norte SAC ("CDPN") and the Cooperativa de Cacao Peruano SAC ("CDCP"). CDPN is the direct owner of the Group's cacao plantations while CDCP administers the Company's innovative small farmer programme, Programa Alianza Producción Estratégica Cacao ("PAPEC").

UCL admitted to trading on AIM on 2 December 2014, raising approximately $10 million (£6.4 million) by way of a placing of ordinary shares in the capital of the Company (the "Ordinary Shares") with existing and new investors. Subsequently, the Company completed a dual listing on the Lima Stock Exchange (Bolsa de Valores de Lima) on 19 June 2015 and, as announced earlier today, successfully completed a placing of new Ordinary Shares to raise $1.28 million at a price of US$2.70 per share (approximately 176 pence).

The Company seeks to be the world's largest and lowest cost corporate grower of cacao when it expects to complete the planting of its existing 3,250 hectare estate in 2017. As at the end of September 2015, the Company had a total planted area of 1,199 hectares (comprised of 1,150 hectares of owned estates and an additional 49 hectares under PAPEC) and expects to have a total planted area of 2,200 hectares by 31 March 2016 (comprised of 2,000 hectares of owned estates and 200 hectares under PAPEC).

Directors

The Board currently comprises Dennis Melka as Executive Chairman and Chief Executive Officer, Anthony Kozuch as Executive Director and Constantine Gonticas and Roberto Tello as Non-Executive Directors. The Directors will monitor the composition of the Board on an ongoing basis and appoint further executive and/or non-executive directors as appropriate.

Dennis Nicholas Melka, Founder, Executive Chairman and Chief Executive Officer (Aged 42)

Previously, Mr. Melka was the Co-Founder, Executive Director and Joint Chief Executive Officer of Asian Plantations Limited, a plantation company quoted on AIM. Asian Plantations Limited was admitted to AIM in November 2009 at 75 pence per share and was subsequently purchased by a strategic acquirer for 220 pence per share in October 2014; during this time period, the market capitalization grew from £22 million (at Admission) to £110 million at the time of acquisition. Since 2006, Mr. Melka has co-founded and launched companies in agriculture, consumer finance, hotels and mobile telecommunications; three of these companies were successfully listed on a public securities exchange. Mr. Melka started his career as an investment banker with Credit Suisse First Boston in 1995 where he remained until 2005 during which time he was based in New York, London, Prague, Singapore and Bangkok. Mr. Melka graduated magna cum laude from the Edmund A. Walsh School of Foreign Service, Georgetown University in Washington D.C. He is a Czech citizen and resident in the Grand Cayman, Cayman Islands.

Anthony ("Tony") John Kozuch, Executive Director (Aged 42)

Mr. Kozuch was born and raised in Mexico City and is a native Spanish speaker. Over the last 13 years, Mr. Kozuch has been the Chief Financial Officer of Communiqué Conferencing, Inc., an international conferencing services company he co-founded in 2001. Prior to Communiqué, Mr. Kozuch served in various channel marketing, programme management, and business development roles with voice and data providers in the U.S. and Latin America including Winstar Communications, Concert and Avantel (MCI's joint venture in Mexico). Mr. Kozuch travels frequently to Central and South America and is also an Executive Director of United Oils Limited SEZC, a palm oil plantation company with over 10,000 hectares planted in Peru. Mr. Kozuch graduated from the Edmund A. Walsh School of Foreign Service, Georgetown University in Washington DC. He is a U.S. citizen and resides in Washington, D.C.

Constantine Gonticas, Non-Executive Director (Aged 48)

Mr. Gonticas has been a Senior Advisor to the Blackstone Group since 2012. He is also an active investor through Green Square Capital Limited, his personal investment vehicle. Previously, from 2004 to 2011, Mr. Gonticas was the Managing Partner of Novator LLP, an investment company specializing in Central & Eastern Europe. Whilst at Novator, Mr. Gonticas sourced a number of investments, including PLAY (a Polish mobile telephony company which is one of the largest ever start-ups in the region), Netia (Polish fixed line telephony) and Forthnet (fixed line telephony in Greece). He has served as Vice Chairman of the Supervisory Board of PLAY and was also Vice Chairman of the Boards of Netia and Forthnet. Before Novator, Mr. Gonticas was Head of Investment Banking for Central and Eastern Europe, Middle East and Africa for Merrill Lynch and prior to that spent 12 years at Credit Suisse First Boston. Mr Gonticas has a law degree from Oxford University. He is a UK citizen and resident in London.

Roberto Tello Pereyra, Non-Executive Director (Aged 45)

Mr. Tello is the principal legal counsel for the Company's wholly owned operating subsidiary, Cacao Del Peru Norte SAC, in Iquitos, Peru. As the founding partner of Estudio Juridico Tello Pereyra Abogados in Iquitos, Mr. Tello advises corporate clients and municipalities throughout the Peruvian region of Loreto. Mr. Tello is a frequent lecturer for legal forums and congresses throughout Latin America with a specialization in administrative law. In Peru, Mr. Tello is at the forefront of Peru's newly instituted legal procedural code and has organized training seminars for government appointed superior justices and prosecutors. He earned his law degree from the Universidad Nacional Mayor de San Marcos and is the President of the Council of Arbitration for the Loreto Chamber of Commerce. Mr Tello is a Peruvian citizen and resides in Iquitos, Peru.

The Group is managed by a team of executives with a combined approximate sixty years of experience in the cacao business.

Sector Classification

UCL will be classified as a Food Producer company on ISDX.

Substantial Shareholdings

As at the date of this announcement, the Directors were aware that the following persons were interested, directly or indirectly, in three (3) per cent or more of the Ordinary Shares:

(1) Inclusive of shares held directly by Mr. Melka. East Pacific Capital Private Limited is wholly owned and controlled by Dennis Melka, the Company's Executive Chairman and Chief Executive Officer. Includes Ordinary Shares subscribed for in a placing completed today.

(2) Entities managed by Pacific Agri Capital SEZC Limited

The Company currently has 19,064,074 shares outstanding. The percentage of Ordinary Shares in public hands is 30.00 per cent. There are no restrictions on the transfer of Ordinary Shares or the Bonds.

Further Information

Copies of the Information Memorandum prepared in connection with the admission of the Bonds to the ISDX Growth Market will be available free of charge during usual business hours on any weekday (public holidays excepted) at the offices of Strand Hanson Limited at 26 Mount Row, London W1K 3SQ and on the Company's website: www.unitedcacao.com

The Information Memorandum references the AIM Admission Document prepared in connection with the Company's admission to trading on AIM in December 2014 which is also available on the Company's website.

For the avoidance of doubt, the Ordinary Shares, which currently trade and will continue to trade on AIM, will not also be admitted to trading on the ISDX Growth Market. The Bonds and the Ordinary Shares are both eligible for CREST settlement.

Pursuant to the ISDX Rules, the Directors who have subscribed for the Bond Issue, being Mr Dennis Melka and Mr Constantine Gonticas, have agreed with the Company and Strand Hanson Limited not to dispose of any of their interests in the Bonds for a period of at least 12 months from the date of Admission, save in those circumstances expressly permitted by the ISDX Rules and/or the lock-in agreement (further details of which are disclosed in the Information Memorandum).

The Company is not subject to the UK City Code on Takeovers and Mergers (the "Code"), however the Company has incorporated certain key Code principles into its Articles of Association.

The Directors of UCL accept responsibility for this announcement.

Company Contact Details

ISDX Corporate Adviser and Contact Details

Strand Hanson Limited, 26 Mount Row, London W1K 3SQ

James Harris / James Spinney / Ritchie Balmer

Telephone: +44 (0) 207 409 3494

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