Fundraising Update

RNS Number : 3876J

Mercantile Ports & Logistics Ltd

04 December 2018

 

4 December 2018

Mercantile Ports & Logistics Limited ("MPL" or the "Company")

Fundraising Update

Further to the Company's announcement of 16 November 2018 and the circular sent to shareholders on 17 November 2018 (the "Circular"), the Company is pleased to confirm that the documentation implementing the investment by Hunch Ventures and Investment Private Limited ("Hunch Ventures") has been completed.

As set out in the Circular, a promissory note/bank guarantee (or other similar form of financial instrument or guarantee) was to be issued by Hunch Ventures to and for the benefit of the Company in an amount equal to approximately £8.29 million (the "Subscription Price"). This was required by the Company to support Hunch Ventures' commitment, as payment of the Subscription Price from India to the Company's bank account in Guernsey requires the approval of the Reserve Bank of India ("RBI"), with the flow of funds happening following that approval.

Given that it has now been determined that a promissory note/bank guarantee is also likely to require the approval of the RBI, the Company's wholly owned subsidiary and the entity in India which owns the project, Karanja Terminal and Logistics Private Limited ("KTLP"), has instead received a corporate guarantee and indemnity in its favour from Hunch Ventures and a personal guarantee and indemnity from Kamaljeet Singh Ahluwalia, a director of Hunch Ventures.  These guarantees and indemnities will allow KTLP to demand the cash payment of a sum up to the amount of the Subscription Amount at any time following Admission (and not just if approval of the RBI is not received before 31 March 2019) and while the RBI's approval of the payment of the Subscription Amount to the Company is awaited. The Company has received confirmation from Mr Ahluwalia's bank confirming that he has sufficient funds to satisfy his obligation.

MPL	C/O Newgate Communications [phone]
Cenkos Securities plc (Nomad and Broker)	Stephen Keys [phone]
Newgate Communications (Financial PR)	Adam Lloyd Fiona Norman [phone] [e-mail]

-ENDS-

 

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