Forestry Update

RNS Number : 8495C

Obtala Resources Limited

30 June 2016

 

30 June 2016

Obtala Resources Limited

("Obtala", the "Group" or the "Company")

(AIM: OBT)

Forestry Update

Highlights

·      US$500,000 investment in the forestry division

·      Investment by one independent HNW investor and Chairman

·      Full US$500,000 investment to be received within 30 days

Obtala Resources Limited (AIM:OBT), the African focused agricultural and forestry company, is pleased to announce that it has entered into two separate agreements with a High Net Worth investor ("HNW") and with the Chairman of Obtala, Miles Pelham, for an inward investment of US$500,000 into the existing Meradell (2) Ltd investment vehicle, as previously announced on 17^th February 2016 and amended as announced on 29 June 2016.

The investment proceeds, to be received within 30 days, will be used to further develop production capabilities within the Forestry division by building additional drying units and investing in other operating machinery.

Miles Pelham, Chairman of Obtala, will invest US$250,000 into Meradell (2) Limited thereby acquiring economic benefit of 714 hectares via a 1.42% shareholding in Meradell (2) Limited. From 1^st July 2021 the Chairman has the right to put the investment back to Obtala for the nominal US$250,000 amount invested, payable in cash or the then equivalent value of Obtala shares at Obtala's choosing. From 1^st July 2023 the Company similarly has the right to call back the investment on the same terms.

The Chairman's investment was approved by the independent directors (excluding Miles Pelham), who considered the terms of the transaction to be fair and reasonable.

A HNW investor based in Hong Kong will invest US$250,000 into Meradell (2) Limited thereby acquiring economic benefit of 833 hectares via a 1.67% shareholding in Meradell (2) Limited. From 1^st July 2021 the investor has the right to put the investment back to Obtala for the nominal US$250,000 amount invested, payable in cash or the then equivalent value of Obtala shares at Obtala's choosing.  From 1^st July 2023 the Company similarly has the right to call back the investment on the same terms.

Miles Pelham, Chairman's, CEO's comment:

"This important investment enables further expansion of our production capabilities at a time when timber orders are robust and in quantities that exceed our current capacity by several multiples.

With the recent strengthening of the management capabilities in-country I look forward to continued progress in the efficient scaling of our expansion plans for the forestry division."

Obtala Resources Miles Pelham - Chairman Paul Dolan - CEO www.obtalaresources.com	[phone]
ZAI Corporate Finance Limited (Nomad)                 Ray Zimmerman/ Peter Trevelyan-Clark /Jamie Spotswood	[phone]
Brandon Hill Capital  (Broker)      Jonathan Evans	[phone]

 

END

 

 

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