OPP.L Regulatory News (OPP)

28 May 2009 07:00



28 May 2009

Origo Resource Partners Limited

Further investment in IRCA

Origo Resource Partners Limited ("ORP" or the "the Fund") announces a follow-on investment of up to US$2.5 million ("the Investment") in IRCA Holdings Limited ("IRCA").

The Investment, which will be funded from ORP's existing cash resources, will enable IRCA to capture a number of opportunities to substantially enhance its growth and profitability. The Investment will be structured via an extension of the convertible loan stock arrangement under which Origo Sino-India PLC ("Origo" or "OSI") and ORP together invested a total of US$5 million in IRCA (at that time named IGH Limited) on a 30:70 basis, as announced on 22 April 2009. Following completion of the Investment ORP will have an equity interest of up to 46% in IRCA assuming conversion of the loan stock.

IRCA and its subsidiary companies (the "IRCA Group") will use the funds committed by ORP to:

Acquire a controlling stake in IRCA Middle-East (currently a 45% joint venture), allowing consolidation of this business into IRCA's group accounts;

Establish a new joint venture in Saudi Arabia which will enable the IRCA Group to enter the oil-service industry in conjunction with an established local partner;

Assume 100% ownership of IRCA India, which provides software, allowing the IRCA Group to reduce software development fees and increase its intellectual property base;

Establish a risk management consultancy offering through the expansion of the existing IRCA India business; and

Undertake various growth initiatives.

Commenting on today's announcement, Chris Rynning, Executive Director of ORP said: 

"We are confident that a significant opportunity exists for IRCA to expand its business in the fast growing Middle Eastern market whilst also increasing its footprint in the higher margin software sector.

"I am delighted that we are continuing to build upon the close relationship we have established with IRCA with the goal of delivering returns to ORP's shareholders." 

ENDS

Further information:

Notes to editors:

IRCA

IRCA aims to become the leading global provider of operational and environmental risk management solutions to industry, focused on the mining, power, construction and manufacturing industries and on the public sector. 

The IRCA Group will comprise a network of 15 subsidiaries across 5 continents. IRCA is actively seeking to expand its international roll-out, both organically and by acquisition, in the key Asia Pacific, South American and Middle East markets. 

In China specifically, the demand for operational and environmental risk management services is largely driven by legislative compliance and mandatory budget allocations. IRCA expects recent legislative changes in that market to represent a significant growth opportunity in the years ahead. 

The businesses of the IRCA Group achieved, on a pro forma basis for the financial year ended 31 December 2008, revenues of approximately $19 million, pre-tax losses of approximately $0.8 million, including approximately $0.7 million of one-off costs, and had net liabilities at year end of approximately $0.2 million. The directors of IRCA expect the IRCA Group to experience revenue growth in the 2009 financial year and to be profitable.