Cradle Arc PLC

Provisional Judicial Management Order of Leboam

RNS Number : 1176L
Cradle Arc PLC
20 December 2018
 

Cradle Arc plc / EPIC: CRA.L / Market: AIM / Sector: Mining

 

 

 

20 December 2018

Cradle Arc plc

("Cradle Arc" or the "Company")

Provisional Judicial Management Order of Leboam Holdings (Proprietary) Ltd

 

Cradle Arc (AIM: CRA), the African focused base and precious metals exploration and production company, announces that the Botswana High Court has issued a Provisional Judicial Management Order (the "Order") for its 60 per cent. owned subsidiary, Leboam Holdings (Proprietary) Ltd ("Leboam"), the holding company of the Mowana Copper Mine in Botswana ("Mowana" or the "Mine"). The Order became effective on 18 December 2018.

In terms of the Order, Mr John Hinchcliffe, an accredited and registered Chartered Accountant in Botswana has now been appointed as the Provisional Judicial Manager. Pursuant to the terms of the Order, with effect from 18 December 2018, the Provisional Judicial Manager shall:

·     Secure and preserve the assets of Leboam.

·     Prevent the mismanagement of Leboam.

·     Ensure Leboam is able to meet its obligations.

·     Do all things necessary to preserve the interests of the members and creditors of Leboam.

The Provisional Judicial Manager is required to file a report regarding the financial position of Leboam to a meeting of creditors of the company, to be convened before the Master of the High Court, by no later than 18 February 2019.

Pursuant to the terms of the Order, Leboam has until 21 February 2019 to submit its answering affidavit, or business plan going forward following the meeting of the creditors of Leboam. The matter will thus be set down for hearing on 28 February 2019 for the Court to determine if Leboam be discharged from Provisional Judicial Management or make any other order it deems fit. Further to its announcement of 18 December 2018, the Company shall transfer its Provisional Liquidation application to the Gaborone High Court to be heard as one on 28 February 2019.

The Company has commenced discussions with various existing and potential funders in order to find a solution to the financing required for Leboam and the future operations of the project. There can be no guarantee that the Company will be able to secure the necessary financing in order to support a credible business plan to the Botswana High Court by 21 February 2019.

In addition, as well as needing to raise funds for Leboam as set out above, the Company needs to raise funds to finance its corporate overheads and general administration costs, as well as to maintain and/or develop its other assets. Whilst the Board is confident it will be able to raise the required funds, should such funds not be forthcoming in the near term, the Board believes that it is highly likely that the Company would become insolvent, and insolvency proceedings, such as administration or liquidation, will be commenced in respect of the Company.

 

As set out in note 4 to the Company's annual report and accounts for the year ended 31 December 2017, the Company had a VAT receivable of £546,406 and there is an ongoing inquiry by HMRC regarding the Company's VAT registration. The Directors' remain confident that the VAT registration in place for the Company is fully compliant and are confident that a repayment of VAT to the Company will become due in the near term.

 

Further announcements regarding the Company's progress on these matters will be made as and when appropriate.

 

Kevin van Wouw, CEO of Cradle Arc, commented:

"The Company will co-operate with the Provisional Judicial Manager in order to seek the best financing and operational plan for Leboam, to resolve the group's current financial difficulties.

 

"Following from the impasse between Fujax and the Secured Lenders to the project, where the working capital facility agreed was not completed and which has directly led to this situation, we have commenced discussions with various existing and potential funders in order to attempt to secure a suitable financing solution for the project going forward.

 

"The Company has made significant investment in this project, and as such we will continue to preserve the value where possible by following these processes to their conclusion."

 

**ENDS**

 

For further information on the Company, please visit www.cradlearc.com or contact:

 

Cradle Arc plc

Kevin van Wouw

Mark Jones

 

Tel: +44 (0)20 7637 5216

Strand Hanson Limited

James Spinney

Matthew Chandler

James Dance

Tel: +44 (0)20 7409 3494

SP Angel Corporate Finance LLP

Ewan Leggat

John Meyer

 

Tel: +44 (0)20 3470 0470

Tavistock Communications Limited

Charles Vivian

Gareth Tredway

 

Tel: +44 (0)20 7920 3150

M: +44 (0)79 7729 7903

M: +44 (0)77 8597 4264

 

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014.


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