Cambria Africa Regulatory News (CMB)

Cambria Africa Plc

("Cambria" or the "Company")

Proposed Open Offer for £4.28 million

Issue of 5 Million Shares to Directors

and

Cancellation of 3.73 Million Shares

Proposed Open Offer

Following the release of the positive interim results on 20 April 2018, Cambria is pleased to announce it is proposing an Open Offer at 1.10p to raise up to £4.28 million which will include up to £1.60 million through the conversion of loans into equity by Venture Africa Limited ("VAL").

- VAL will limit its Open Offer Participation to converting a maximum of £1.60 million in its outstanding debt to equity.

- Remaining Shareholders' Open Offer Entitlement will be more than three times that of VAL resulting in the potential dilution of VAL dependant on the level of Open Offer take-up.

- If all Open Offer Shares are subscribed for (through normal entitlements and excess allocations) VAL's shareholding would be diluted to approximately 50.8%.

- Remaining Shareholders will be entitled to apply for unallocated shares through an Excess Application Facility.

- Shareholders at the Record Date, expected to be on or around 29 May 2018, will be able to participate in the Proposed Open Offer.

The price of the Open Offer will be 1.10p per Cambria share ("the Open Offer Price") representing a discount of 8% to the volume weighted average price of 1.19p for the 30 days up to 4 May 2018.

VAL's Open Offer Participation

VAL's combined loan balance to Cambria as at 28 February 2018 was £1.80 million, or approximately $2.43 million, being $1.46 million in respect of the VAL Loan and $973,000 in respect of the VAL Bridging Facility ("the VAL Loans").

VAL as 65.6% shareholder of Cambria supports the Open Offer and has undertaken to subscribe via converting up to £1.60 million of its outstanding loans into equity: equivalent to up to 145 million Open Offer Shares. VAL has undertaken to limit its participation to 145 million Open Offer Shares in favour of Remaining Shareholders. Effectively, VAL will be capping its Open Offer Entitlement to 0.625 Open Offer Shares per Existing Ordinary Share held (compared to 2 for every one for Remaining Shareholders - more than three times as many).

VAL's Open Offer Participation is subject to a related party opinion in accordance with the AIM Rules for Companies, as VAL is a substantial shareholder and its ultimate beneficiary is Samir Shasha, Cambria's CEO.

Open Offer Entitlement - Remaining Shareholders

Remaining Cambria shareholders will be entitled to subscribe for up to 243,678,024 Open Offer Shares in proportion to their current shareholdings on the basis of 2 Open Offer Shares for every Existing Ordinary Share held. The higher Entitlement Ratio will accordingly allow remaining Cambria shareholders to proportionally increase their shareholdings through participation in the Open Offer. Should the Open Offer be fully subscribed, VAL's shareholding would decrease to 50.8%.

Applications for excess allocations

Remaining Shareholders can apply for excess allocations beyond their pro-rata entitlements. Applications, through an Excess Application Facility, will be accepted from Remaining Shareholders to the extent that other shareholders do not take up their full entitlements. VAL will not apply for any Excess Entitlements.

Financial Effects

A fully subscribed Open Offer would increase Net Asset Value ('NAV') per share by 0.51 cents (US) per share to 1.03 cents (US) per share from 0.52 cents (US) per share, a 98% improvement. Debt will fall by 73% from $2.96 million to $804,000 as a result of VAL's Open Offer Participation. It is noted that the Company's consolidated financial statements are presented on the historical cost basis and in the Cambria board's view, reported NAV does not account for what it considers is the current fair value of its investments and proprietary technologies.

In the opinion of Cambria Board of Directors, the Open Offer Price at a Price to Earnings ratio of 2.8 times Cambria's annualised earnings based on the six month period ended 28 February 2018, presents Cambria shareholders with an attractive opportunity to increase their shareholding in Cambria through orderly access to Cambria shares at a fixed price. Importantly, Cambria is one of the few remaining AIM quoted companies offering investors exposure to the improving Zimbabwe economic conditions.

The Open Offer proceeds will be utilised to fund acquisition and the growth of Cambria's existing subsidiaries in Zimbabwe.

Timetable

The Company will publish a detailed announcement regarding the publication of an Open Offer circular and the Open Offer implementation timeline including its Record Date, in due course. Shareholders holding shares at the Record Date will be entitled to participate in the Proposed Open Offer.

Issue of shares to Directors

Cambria's Directors have since their appointment in 2015 provided services and management support without compensation. While the Board is willing to continue serving without compensation at least through the end of FY 2018, the Board has accepted a proposal from CEO Samir Shasha to issue 5,000,000 Cambria shares ("the Directors' Shares") to Directors and Consultants as compensation for their services as follows:

The Directors' Shares will be issued in terms of Section 38 of the Isle of Man Companies Act, 2006 ("Section 38") and the Company's Articles of Association ("the Directors Share Issue"). The Directors Shares Issue will be implemented prior to the Open Offer.

In accordance with the provisions of Section 38, the Cambria Board has determined that, in their opinion, the present cash value of the non-money consideration for the Directors Share Issue is not less than the amount to be credited for the issue of the Cambria ordinary shares.

Mr. Samir Shasha, as the ultimate beneficiary of over 65.6% of Cambria's shares, will not participate in the Directors Share Issue and will continue to serve without compensation in the current financial year.

Cancellation of Shares

It was announced on 26 August 2013 that the Company had concluded the acquisition of the entire issued share capital of chemical distributor Chemicals & Marketing Company Limited ("C&M"). Following a more in-depth understanding of the financial affairs of C&M, as previously announced, the Company and the C&M Vendors entered into a Disengagement Agreement dated 29 June 2015, in terms of which the parties agreed that the C&M acquisition will be reversed and the parties be restored to their initial positions.

The 3,734,756 Cambria ordinary shares registered in the name of the C&M vendors have only now been fully returned to the Company and are in the process of being submitted to the Company's Transfer Agent for cancellation (the "C&M Share Cancellation").

Number of shares in issue

Cambria confirms that it will apply to AIM for the admission of 5,000,000 ordinary shares of 0.01p each in the Company in respect of the Directors Share Issue and the cancellation of 3,734,756 shares issued to the C&M Vendors. Open Offer Entitlement calculations have been done after taking into account the Directors Share issue and the C&M Share Cancellation.

It is anticipated that trading in the shares issued under the Directors Share Issue will commence on 22 May 2018 ("Admission"). Following Admission and the C&M Share Cancellation, but prior to the Open Offer, the Company will have 353,839,012 total shares in issue. Cambria has no shares in Treasury, therefore this figure may be used by shareholders, from Admission, 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.

Comment

Commenting on the Proposed Open Offer, Mr. Shasha said, "We believe that the new political environment in Zimbabwe will provide a growing market for our current investments and opportunities which we are uniquely positioned to identify and act on. Cambria is one of the few AIM listed shares which allows investors to participate in Zimbabwe's potential. The strengthening of our balance sheet will allow us to capitalise on opportunities for expanding our current business units in Zimbabwe and the acquisition of new businesses. The Proposed Open Offer gives shareholders the opportunity to increase their level of participation in Cambria's improved prospects. It provides an orderly access to Cambria shares at an attractive fixed price of 1.10p."