Cambria Africa Regulatory News (CMB)

19 Feb 2013 07:00



Cambria Africa plc

("Cambria" or the "Company")

Cambria raises additional Debt FinancingEntry of Zambian markets by Millchem 

Cambria (AIM:CMB) is pleased to announce that it has successfully secured an additional US$ 1.5 million in debt financing from Consilium Investment Management (1) (Consilium) bringing the total facility held with Consilium to US$ 4.5 million.

The increased financing now available will be used to fund entry of Cambria's rapidly growing Millchem investment into the Zambian market, refinance existing debt obligations of the Company, as well as for general working capital purposes.

Millchem, a wholly owned subsidiary of Cambria, is a value-added chemicals distributor with substantial reach and a leading market position in Zimbabwe. It is the premier distributor in the country of, among others, solvents, metal treatments, and alkyd resins. In a trading update released by Cambria on September 19, 2012, it was announced Millchem had organically grown gross profits year-on-year by 95%.

Cambria's Chief Executive, Edzo Wisman, commented: "Besides refinancing existing liabilities of the Company, this new financing facilitates an acceleration of Millchem's entry into the Zambian market. Millchem has increasingly explored opportunities in the region on the back of stellar growth achieved in the Zimbabwean business. After the success of initial sales into Zambia, Cambria will now invest in a more structured presence for Millchem, including a Lusaka office and warehouse. Various existing suppliers, encouraged by Millchem's rapid growth in Zimbabwe, have already offered to extend Millchem's Zimbabwe agencies into Zambia."

Cambria's Payserv investment, until recently operating as Paynet Group, established a Lusaka office in December 2012, in anticipation of entering the Zambian market. Partnering with existing players it expects to lead with its Paynet EDI switching technology and make available its other outsourcing products to Zambia's growing financial and business sector.

The regional expansion of both these key portfolio companies is in line with Cambria's continued strategy, actively focusing on value creation within our profitable, core investments.

Ian Perkins, Cambria's Chair, commented on the increased facility with Consilium: "We continue to appreciate the confidence from our significant shareholder Consilium in the progress made at Cambria, evidenced again with this additional debt financing provided to us."

Jonathan Binder, Managing Director of Consilium Investment Management, adds: "We remain excited and impressed with the developments at Cambria and, as already stated in December, we are committed to playing a supportive role in providing debt and equity finance for the company."

The facility, as previously disclosed in an RNS 10 December 2012, carries a 15% annualized interest rate and is due for repayment 8 March 2014. As part of the expansion of the debt facility with US$ 1.5m, Consilium has been given a 'general charge' over the Company, while maintaining security directly related to certain properties owned by Cambria, as well as receipt of a warrant instrument (the "Warrant"). The Warrant provides for the issue of 5,000,000 new ordinary shares of £0.0001 each in the capital of the Company at an exercise price of 13p per Share. The Warrant is exercisable in whole or in part by Consilium at any time prior to 15 February 2016.

Consilium, through the various funds it manages, is a substantial shareholder of Cambria, and the transaction is therefore deemed a related party transaction for the purpose of the AIM Rules for Companies.

With the exception of Ian Perkins, a director nominated by Consilium's investment manager, the Directors, having consulted with WH Ireland, the Company's nominated advisor, consider the terms of the debt facility to be fair and reasonable insofar as its shareholders are concerned.

(1) Consilium Investment Management in this restructuring represented the Consilium Corporate Recovery Master Fund and the Consilium Emerging Markets Absolute Return Master Fund

About Cambria Africa plc

Cambria Africa plc, quoted on the AIM market of the London Stock Exchange, is a long term, active investment company, building a portfolio of investments primarily in Zimbabwe.