Ambrian PLC Update on Mechanical Completion (3013N)
May 15 2015 - 3:44AM
UK Regulatory
TIDMAMBR
RNS Number : 3013N
Ambrian PLC
15 May 2015
Ambrian plc
("Ambrian" or the "Company")
Update on Mechanical Completion of Cement Plant in
Mozambique
On 8 May 2015, Ambrian announced the allotment and issue to
Consolidated General Minerals plc ("CGM") of Initial Convertible
Securities and two tranches of Deferred Convertible Securities as
consideration for its acquisition of CGM's shareholding in Ambrian
Metals Limited (following its merger with Consolidated General
Minerals (Schweiz) AG (the "Merger")). As also announced by Ambrian
on 8 May 2015, the liquidators of CGM confirmed to Ambrian that day
that they had immediately distributed all such securities to CGM
shareholders pro rata to their holdings of CGM ordinary shares at
the record date of 3 May 2015 (or to charity in respect of CGM
shareholders' fractional entitlements).
Mechanical completion and impact on the Merger consideration
Both tranches of the Deferred Convertible Securities have
certain conditions attached which must be fulfilled prior to
conversion into ordinary shares in Ambrian.
In particular, the conversion of the 19,414,205 First Tranche
Deferred Convertible Securities, representing 10 per cent. of the
total consideration under the acquisition agreement entered into
between CGM and the Company in respect of Ambrian's acquisition of
CGM's shareholding in Ambrian Metals Limited (the "Acquisition
Agreement"), remained dependent on the cement plant in Mozambique
achieving 'mechanical completion' by no later than 15 May 2015. The
independent engineer appointed for the purpose has reported that
the cement plant has not achieved 'mechanical completion' (as
defined in the Acquisition Agreement). Consequently, the First
Tranche Deferred Convertible Securities will not convert into
ordinary shares in Ambrian and instead will automatically convert
into 'special deferred shares' in accordance with the rights
attaching to the First Tranche Deferred Convertible Securities (as
set out in paragraph (b) of resolution no. 4 passed at Ambrian's
General Meeting on 5 March 2015). These 'special deferred shares'
are effectively valueless and no certificates will be issued to the
shareholders of CGM in respect of them.
As a result, the consideration for the Merger is that Ambrian
will issue 19,414,205 fewer ordinary shares than was envisaged in
Ambrian's AIM admission document dated 17 February 2015.
The conversion of the 9,707,102 Second Tranche Deferred
Convertible Securities, representing 5 per cent. of the total
consideration under the Acquisition Agreement, remains dependent on
the dissolution of CGM.
Revised timetable for 'mechanical completion'
A revised timetable by the project management team and
contractors anticipates that 'mechanical completion' will be
achieved by the end of June 2015. Slippage of the timetable to
completion is attributable to a number of factors such as slower
than anticipated installation of the electrical components of the
plant and testing thereof. Also of significance is the late
delivery of some critical high voltage components that will
adversely impact the completion date of the substation and the
likely connection by the power utility of the plant to the main HV
transmission line.
Robert Adair, Chairman of Ambrian, said:
"Whilst it is obviously disappointing that the Beira cement
plant has not completed on schedule, we recognise that the timely
completion of these sort of projects in the environment in which we
are operating can be challenging and subject to delays caused by
exogenous factors difficult to predict. We remain firmly convinced
that the strategy underpinning the construction and development of
this project in Mozambique will positively develop shareholder
value and provide attractive returns for the Company. Our people
and the contractors on site continue to spare no efforts to bring
the plant into production as fast as possible."
For further information, please contact:-
Ambrian plc
Roger Clegg +44 (0)20 7634 4700
Cenkos Securities plc
Neil McDonald +44 (0)131 220 9771
Nick Tulloch +44 (0)131 220 9772
This information is provided by RNS
The company news service from the London Stock Exchange
END
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