CHOC.L Regulatory News (CHOC)

6 January 2017

United Cacao Limited SEZC

("United Cacao" or the "Company")

Funding Update

United Cacao Limited SEZC (AIM: CHOC) (the "Company"), the AIM-quoted cacao plantation company based in Peru, provides the following funding update.

Further to the Company's announcement on 22nd of December 2016 (the "December 22nd Press Release"), after thorough and careful consideration of the Company's options, the Board has entered into an exclusivity agreement ("Exclusivity Agreement") and a non-binding heads of terms ("Non-Binding Heads") with certain existing investors in the Company (the "Investors"). The Exclusivity Agreement will expire on 15 February 2017 and is intended to provide the Company and the Investors with the opportunity to structure and negotiate a longer-term financial solution to the Company's historical and prevailing liquidity problems. The Non-Binding Heads contemplate the possible issuance of additional 7.00 per cent, convertible bonds ("Secured Bonds") and/or new ordinary shares of US$ 0.001 each ("Ordinary Shares"). However, any investment would be conditional upon the satisfaction of certain conditions and there can be no assurances that this can be achieved.

In the interim, the Company has today entered into a subscription agreement ("Subscription Agreement") pursuant to which the Company has issued a total of US$ 250,000 nominal of Secured Bonds at a subscription price of $0.60 per US$ 1 nominal of Secured Bond. The subscription price reflects the suspension of the Company's shares from trading on AIM and the suspension of the Secured Bonds from trading on the NEX Exchange Growth Market.

The US$ 150,000 proceeds will be used exclusively to pay a portion of the December 2016 salaries due to employees of the Company's Peruvian subsidiary, Cacao del Peru Norte SAC ("CDPN"), the balance of which is intended to be paid from existing cash balances. This is a statutory obligation of the Company which needs to be met by no later than 6 January 2017 in order to avoid possible serious adverse consequences to the Company.

The Company paid the interest due on 31 December 2016 in relation to the Secured Bonds on 3 January 2017.

The Board has authorized the immediate reduction of the labour force at CDPN to 250 field workers from 450 field workers, resulting in anticipated monthly savings of approximately US$85,000.

Despite the new issue of Secured Bonds, the Company is experiencing significant financial constraints and operating challenges. The directors believe that the Company's current payables, before paying the salaries referred to above, exceed US$1,250,000. Based upon a careful analysis of its options, the Board is no longer confident that the Company will be able to meet its financial obligations in the absence of a longer term funding strategy. The Company will therefore continue to negotiate further funding with the Investors as contemplated by the Non-Binding Heads.

The Board will provide further updates as necessary

For more information please visit www.unitedcacao.com or contact: