TIDMAMBR
RNS Number : 5008A
Ambrian PLC
08 June 2016
LONDON, 8 June 2016
AMBRIAN PLC
Preliminary Results for the year ended 31 December 2015
Ambrian plc ("Ambrian" or the "Company" and, together with its
subsidiaries, the "Group") today announces its audited consolidated
results for the twelve months ended 31 December 2015.
Highlights
-- Completion of business combination with Consolidated General
Minerals (Schweiz) AG ("CGM") in March 2015 and commissioning of
the cement plant in Mozambique
-- Loss before tax for the period of US $9.36 million (2014:
profit before tax of US$ 1.10 million) primarily reflecting the
challenging metals' marketing conditions
-- Net asset value at 31 December 2015 of US$ 46.23 million (31
December 2014 : US$ 29.21 million), equivalent to USc 21.7 per
share (31 December 2014: USc 29.0) attributable to the purchase of
the cement business in Mozambique
-- Total equity at 31 December 2015 of US$ 53.43 million (31 December 2014: US$ 29.15 million)
Commenting on the results, Robert F. Adair, Non-executive
Chairman, stated:
"In 2015 we encountered challenging conditions in the
commodities sector arising from macro-economic factors that
translated into reduced volumes traded in our metals activities
combined with a sharp drop in the premiums for most of the products
we trade. We have taken steps to ensure that our service-like
margin based business model going forward is resilient.
Our cement plant in Mozambique was commissioned in October 2015,
leading to commercial sales of cement shortly before year-end and
this resulted in a positive contribution to the Group for the year.
Our focus will be to secure market share without being disruptive
in an increasing competitive environment and the uncertain economic
situation currently prevailing in the country."
Enquiries
Ambrian plc
+ 44 (0)20 7634
Roger Clegg 4700
Cenkos Securities
plc
+ 44 (0)20 7397
Neil McDonald 8900
Nick Tulloch
Notes to Editors
Ambrian is active is sourcing and marketing a range of
industrials metals, minerals and value added products to industrial
customers worldwide. Ambrian's services add value at every stage of
the supply chain; we plan procurement and logistics to streamline
and simplify transportation and deliver on time commodities in the
most cost efficient manner from remote locations to wherever they
are needed by our customers. We pursue selective strategic
acquisitions and ventures that can demonstrate a compelling
industrial and commercial justification and ultimately strengthen
Ambrian's supply chain and value added activities such as the
manufacturing and distribution of branded cement products in
Mozambique. Ambrian is quoted on the Alternative Investment Market
of the London Stock Exchange under the ticker symbol AMBR.
Further information on the Group is available on the Company's
website www.ambrian.com or the website of Cimentos da Beira Lda
www.cdb.co.mz.
Chairman's and Chief Executive's statement
Overview
2015 has been one of the most testing years in the natural
resources sector. The Bloomberg Commodity Index (a broadly
diversified commodity price index) fell more than 25% in 2015, the
fifth straight losing year and its worst drop since 2008. This
situation has been building up for some time as the world's largest
commodity consumers have experienced a sharp drop in GDP growth
rates including China, a significant market for Ambrian. Part of
the slowdown in China relates to the authorities' attempts to shift
the cornerstone of the country's growth from government spending
and investment fuelled growth to growing private sector
consumption. This, combined with the restructuring of Chinese
state-owned enterprises, tighter credit conditions and inventory
drawdowns, has negatively affected consumption, depressed prices
and created a growing supply surplus in a number of
commodities.
Furthermore, the strong performance of the US dollar against
most currencies in 2015 contributed generally in reducing the
margins of our customers in local currency terms.
Against this backdrop, commodities exporting led economies,
particularly in Africa, have been severely affected. Declining
export receipts creating significant current account deficits and
unsustainable international debt repayment conditions have all
contributed to GDP growth forecasts being sharply revised
downwards. In Mozambique, the situation is particularly acute as
most infrastructure projects, the backbone of the country's efforts
to grow its fledging agricultural and manufacturing sectors, have
been delayed or even cancelled due to the lack of funding and
mismanagement.
Managing our businesses against this depressed macro background
has been difficult but there have been some positive events. We
completed the merger with CGM early in the year and the cement
plant was finally commissioned in October 2015, culminating in
first sales of cement by the end of the year. This modern,
efficient cement plant is the latest industrial-scale production
capacity that has been built in Mozambique. The combination of
efficient production capacity and optimal logistics between plant
and market will enable us to successfully enter the building
materials industry whilst adhering to industry's best practice in
terms of emissions and environmental protection. Good quality
products and service offering have resulted in demand for our brand
in a highly contested market.
The primary focus of the Directors during this period has been
liquidity management, inventory control, improving reporting and
control systems, and ensuring that our business model going forward
is resilient.
Our marketing business certainly has an important role to play
as a specialist merchant in a sector in which a number of
participants have disappeared, leaving customers with fewer
alternatives to transact with qualified partners. The focus in our
cement business is to establish our brand and secure market share
but also to utilise our expertise in developing a marketing and
logistics platform in cement and associated products. We continue
to review the strategy of our businesses within the group and
believe that the current course is the appropriate one in the
present circumstances.
Throughout this period, the support of the Board and our key
stakeholders continues to be very strong as evidenced by the
successful private placement completed in September and the
continued support of our lenders and customers.
Completion of merger
In March 2015, Ambrian and CGM successfully completed the
combination of their businesses. The Group's core business of
physical trading and logistics is now supplemented by the
acquisition of a custom-built cement mill operation in Beira,
Mozambique. The acquisition of this 800'000 tonne annual capacity
facility was justified by its long-term economic rationale and also
by the opportunity to leverage our expertise to source raw
materials competitively and develop an additional marketing
activity.
Fund raising
During the year the Company completed a fundraising for GBP2.6
million with certain of its existing shareholders, Directors and
senior management. This funding was deemed prudent considering the
difficult environment in which we have to operate. The net proceeds
after satisfying cost overruns in the construction of the cement
plant provided the Group with additional headroom for future
general working capital requirements.
Board changes
As a result of the acquisition transaction referred to above, we
(Robert Adair and Jean-Pierre Conrad) joined the Board of the
Company as Non-executive Chairman and Chief Executive Officer
respectively, on 27 March 2015. Furthermore, Martin Abbott and
Charles Davies joined the Board in October. Martin, the former
Chief Executive of the London Metal Exchange, has invaluable
experience in the commodity markets and will undoubtedly assist in
the Group's future development strategy of its marketing activities
whilst emphasizing risk control. Charles, a businessman with a
variety of interests including in Mozambique, will contribute his
"hands on" experience in the Group's drive to develop its portfolio
of operating assets.
During the year, Kevin Lyon stepped down as a Non-executive
Director and Chairman of the Company. The Board is grateful to
Kevin for his unwavering and professional contribution in driving
the merger process to its conclusion.
Outlook
Although most market commentators have predicted an improvement
in the business environment for 2016, there are little visible
signs that this has yet materialised sustainably, particularly in
the markets in which we operate.
In our marketing activities, we have seen a subdued start of the
year as the focus remains on macroeconomic developments in China.
The first quarter of 2016 saw record highs of copper imports
boosted by a favourable arbitrage window, a surge in fixed asset
investments and a recovery in seasonal demand. However, questions
remain on the efficacy of the government stimulus and whether a
recovery in China is sustainable. Whilst copper prices have
rallied, premiums remain subdued into the second quarter of 2016
indicating poor industrial demand. As a result, we have developed
additional businesses in the Middle East, India and Europe and have
increased our business flows with South America and Africa. With a
view to ensuring cash flows are insulated in times of weak market
fundamentals, a significant portion of our trading with long
standing relationships has been contractually arranged at the
beginning of the new year for most or all of 2016. Continuous
reduction in net working capital and improving our cash generation
ability in our marketing activities remain our prime focus.
Finally, we have also invested in improving our finance and risk
management systems and processes to support our enlarged
operations, but more significantly to provide us with the necessary
tools to manage risks more efficiently.
In Mozambique, we have been pleased with the technical
performance of the cement plant in its first few months of
operation and believe that the high quality cement produced is
proving attractive both to retail customers and in the construction
sector. Cement demand is driven by both infrastructure projects and
small and mid-sized private sector initiatives. In Central
Mozambique, 2015 was a particularly good year in terms of cement
demand despite the first signs of problems to come as cement prices
in US dollar equivalent decreased markedly in the second half, in
line with the dramatic weakening of the local currency. Since the
beginning of 2016, the situation has deteriorated rapidly with the
economic situation in the country remaining uncertain as direct
foreign investments and foreign support to the country's budget
deficits have all but dried up. Given current macroeconomic
assumptions and the lack of any visible immediate solution to the
predicament the country is going through, we believe that
residential construction will suffer as disposable income falls and
the banking system is short of foreign currency. The
non-residential construction industry is mostly a function of
infrastructure projects and incentives rolled out by the oil and
gas and mining industries, which have been suspended or postponed.
With increased downward pressure on margins expected and a
reduction in demand growth anticipated, our focus is to secure
market share without being disruptive, improve free cash flows and
reduce gearing in Mozambique. We continue to place emphasis on
liquidity management and generating cash to reduce gearing.
We would like to thank our colleagues for their hard work and
dedication in what has been a challenging year. We look forward to
a better year though no doubt not without its difficulties.
Robert F. Adair Jean-Pierre Conrad
Chairman Chief Executive Officer
Ambrian plc
Consolidated statement of comprehensive income
for the year ended 31 December 2015
Year to 31 Year to 31
December December
2015 2014
US $ 000's US $ 000's
Turnover 1,897,528 2,885,069
Cost of sales (1,902,214) (2,877,276)
------------ ---------------------
Net revenue (4,686) 7,793
Investment portfolio gains 676 784
------------ ---------------------
Total (loss)/income (4,010) 8,577
Administrative expenses (5,177) (6,571)
Exceptional items - acquisition
costs - (904)
------------ ---------------------
Total administrative expenses (5, 177) (7,475)
Operating (loss)/profit (9,187) 1,102
Finance income 428 -
Finance costs (601) -
------------ ---------------------
(Loss)/profit before tax (9,360) 1,102
Taxation 2,339 (574)
------------ ---------------------
(Loss)/profit after tax (7,021) 528
------------ ---------------------
Other comprehensive income
Items that may be subsequently
reclassified to profit or
(loss)
Exchange profit/(loss) arising
from translation of foreign
operations 59 (344)
------------ ---------------------
Total other comprehensive
profit/(loss) 59 (344)
------------ ---------------------
Total comprehensive (loss)/profit (6,962) 184
============ =====================
(Loss)/profit attributable
to:
Owners of the parent (7,324) 518
Non-controlling interest 303 10
------------ ---------------------
(7,021) 528
------------ ---------------------
Total comprehensive (loss)/profit
attributable to:
Owners of the parent (7,265) 174
Non-controlling interest 303 10
------------ ---------------------
(6,962) 184
------------ ---------------------
Earnings per share in USD
cents:
Basic earnings per share (3.87) 0.51
Diluted earnings per share (3.87) 0.51
Ambrian plc
Consolidated statement of changes in equity
for the year ended 31 December 2015
Total
equity
attributable
Shares Share to the
Share Capital Merger to Retained based Employee owner
Share premium Redemption relief be Treasury Other earnings/ payments benefit Exchange of the Non-controll-ing Total
capital account reserve reserve issued shares reserve (losses) reserve trust reserve parent interest equity
US $ US $ US US US US US US US US US US $ US US
000's 000's $ 000's $ 000's $ 000's $ 000's $ 000's $ 000's $ 000's $ 000's $ 000's 000's $ 000's $ 000's
Balance at
31 December
2013 17,665 18,044 - - - (1,986) - (16) 8,052 (11,446) (1,282) 29,031 (66) 28,965
--------- -------- ----------- -------- -------- --------- -------- ---------- --------- --------- --------- ------------- ------------------ --------
Comprehensive
income
Profit for
the year - - - - - - - 518 - - - 518 10 528
Foreign
currency
adjustments - - - - - - - - - - (344) (344) (2) (346)
--------- -------- ----------- -------- -------- --------- -------- ---------- --------- --------- --------- ------------- ------------------ --------
Total
comprehensive
income/(loss)
for the year - - - - - - - 518 - - (344) 174 8 182
Balance at
31 December
2014 17,665 18,044 - - - (1,986) - 502 8,052 (11,446) (1,626) 29,205 (58) 29,147
========= ======== =========== ======== ======== ========= ======== ========== ========= ========= ========= ============= ================== ========
Arising from
the business
combination
of
Consolidated
General
Minerals
(Schweiz)
AG 2,455 - - 26,066 1,477 - (5,066) - - - - 24,932 6,944 31,876
Shares issue
costs (refer
to note 28) - - - (1,296) - - - - - - - (1,296) - (1,296)
Exercise
of options - - - - - - - - - 576 - 576 - 576
Redemption
of Deferred
9p shares (15,898) - 15,898 - - - - - - - - - - -
Stock award - - - - - - 86 - - - - 86 - 86
Comprehensive
income
Profit /
(Loss) for
the year - - - - - - - (7,324) - - - (7,324) 303 (7,021)
Foreign
currency
adjustments - - - - - - - - - - 59 59 - 59
--------- -------- ----------- -------- -------- --------- -------- ---------- --------- --------- --------- ------------- ------------------ --------
Total
comprehensive
income/(loss)
for the year - - - - - - - (7,324) - - 59 (7,265) 303 (6,962)
Balance at
31 December
2015 4,222 18,044 15,898 24,770 1,477 (1,986) (4,980) (6,822) 8,052 (10,870) (1,567) 46,238 7,189 53,427
========= ======== =========== ======== ======== ========= ======== ========== ========= ========= ========= ============= ================== ========
Ambrian plc
Consolidated statement of financial position
at 31 December 2015
As at 31 December As at 31 December
2015 2014
ASSETS US $ 000's US $ 000's
Non-current assets
Property, plant and equipment 76,036 442
Deferred tax asset 2,459 252
----------------------- -----------------------
78,495 694
Current assets
Financial assets at fair
value through profit or loss 7,495 21,933
Inventory 262,541 329,545
Trade and other receivables 60,083 78,505
Current tax receivable 250 -
Cash and cash equivalents 9,823 9,661
----------------------- -----------------------
Total assets 418,687 440,338
LIABILITIES
Non-current liabilities
Long-term borrowings (21,376) -
Deferred tax liability (7,554) -
----------------------- -----------------------
(28,930) -
Current liabilities
Financial liabilities at
fair value through profit
or loss (2,675) -
Short-term borrowings (225,219) (315,065)
Short-term liabilities under
sale and repurchase agreements (43,745) (45,701)
Trade and other payables (64,691) (50,209)
Current tax payable - (216)
----------------------- -----------------------
Total liabilities (365,260) (411,191)
Total net assets 53,427 29,147
======================= =======================
Capital and reserves
Share capital 4,222 17,665
Share premium 18,044 18,044
Capital redemption reserve 15,898 -
Merger relief reserve 24,770 -
Shares to be issued 1,477 -
Treasury shares (1,986) (1,986)
Other reserve (4,980) -
Retained (losses)/earnings (6,822) 502
Employee benefit trust (10,870) (11,446)
Share-based payments reserve 8,052 8,052
Exchange reserve (1,567) (1,626)
Total equity attributable
to the owner of the parent 46,238 29,205
Non-controlling interest 7,189 (58)
Total equity 53,427 29,147
======================= =======================
Ambrian plc
Consolidated statement of cashflows
for the year ended 31 December 2015
Year to Year
31 to 31
December December
2015 2014
US $ 000's US $
000's
(Loss)/profit for the year (7,021) 528
Adjustments for:
Depreciation of property, plant and equipment 435 52
Share-based payment expense 72 -
Foreign exchange gains (825) (533)
Taxation expense (2,339) 574
Realised gain on financial assets designated
at fair value (676) (18)
Decrease/(increase) in inventories 67,004 (120,673)
Decrease/(increase) in trade and other
receivables 22,377 (18,872)
Unrealised losses on financial liabilities
at fair value (428) (2,371)
Unrealised gains/(losses) on financial
assets at fair value 11,115 (19,989)
Increase/(decrease) in trade and other
payables 12,545 (1,471)
Loss on disposal of property, plant and
equipment - 49
----------- ----------
Cash generated/(used) in operations 102,259 (162,724)
Taxation paid (362) -
Net cash flow generated/(used) in operating
activities 101,897 (162,724)
----------- ----------
Investing activities
Net cash from acquisition of subsidiary
undertakings 424 -
Purchase of property, plant and equipment (8,955) (488)
Disposal of property, plant and equipment - 14
Net cash used in investing activities (8,531) (474)
----------- ----------
Financing activities
Share issue costs (1,296) -
Proceeds from issue of convertible loan -
notes 4,121
Proceeds received from the exercise of -
options in Employee Benefit Trust 576
Increase in long-term borrowings (4,793) -
(Decrease)/increase in short-term liabilities
under sale and repurchase agreements (1,956) 12,646
(Decrease)/increase in short-term borrowings (89,846) 138,175
Net cash (used)/generated in financing
activities (93,194) 150,821
----------- ----------
Net increase/(decrease) in cash and cash
equivalents 172 (12,377)
Cash and cash equivalents at the beginning
of the year 9,661 22,075
Effect of foreign exchange rate differences
on cash and cash equivalents (10) (37)
Cash and cash equivalents at the end
of the year 9,823 9,661
=========== ==========
1. Basis of preparation
The financial information set out in this announcement does not
constitute the Group's statutory accounts for the year ended 31
December 2015 or 2014 but is derived from those accounts. Statutory
accounts for the 2014 have been delivered to the Registrar of the
Companies, and those for 2015 will be delivered in due course.
The auditors have reported on those accounts; their reports were
(i) unqualified, (ii) did not include a reference to any matters to
which the auditors drew attention by way of emphasis without
qualifying their report and (iii) did not contain statements under
section 498 (2) or (3) of the Companies Act 2006. The results for
the year ended 31 December 2015 were approved by the Board of
Directors on 7 June 2016 and are audited.
While the financial information included in this preliminary
announcement has been prepared in accordance with the recognition
and measurement criteria of international Financial Reporting
Standards (IFRS's) as endorsed for use in the European Union, this
announcement does not itself contain sufficient information to
comply with IFRS's. The accounting policies adopted in this
announcement have been consistently applied and are consistent with
the policies used in the preparation of the statutory accounts for
the period ending 31 December 2015.
The consolidated financial statements of the Group have been
prepared in accordance with the Companies Act 2006 and
International Financial Reporting Standards (IFRS) as developed and
published by the International Accounting Standards Board (IASB) as
adopted by the European Union (EU).
Presentational currency
The financial statements have been presented in US Dollars which
is the functional currency of the company.
2. Segmental analysis
The Group has four reportable segments attributable to its
continuing operations including Head office:
-- Physical metals and minerals trading
-- Cement operations
-- Investment portfolio - comprises the Group's investment portfolio
-- Head office costs relate to overheads incurred in connection
with operating the public limited company, providing support
functions to the Group.
The measurement of the segmental revenue, profit before tax,
capital expenditure, depreciation, total assets, total liabilities
and net assets have been prepared using consistent accounting
policies across the segments
Factors that management used to identify the Group's reportable
segments
The Group's reportable segments are strategic business units
that offer different products and services. They are managed
separately because each business requires different strategies.
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker.
The chief operating decision maker has been identified as the
management team including the Chief Executive Officer, Chief
Operating Officer and the Finance Director.
Cement Investment Head office
Trading Operations Portfolio costs Total
2015 2015 2015 2015 2015
US $ 000's US $ 000's US $ 000's US $ 000's US $ 000's
Turnover 1,895,451 2,077 - - 1,897,528
Cost of
Sales (1,900,327) (1,887) - - (1,902,214)
Revenue - - 676 - 676
------------ ------------ ----------- ------------ ------------
(4,876) 190 676 - (4,010)
============ ============ =========== ============ ============
Cement Investment Head office
Trading Operations Portfolio costs Total
2014 2014 2014 2014 2014
US $ 000's US $ 000's US $ 000's US $ 000's US $ 000's
Turnover 2,884,979 - - 90 2,885,069
Cost of
Sales (2,877,276) - - - (2,877,276)
Revenue - - 784 - 784
------------ ------------ ----------- ------------ ------------
7,703 - 784 90 8,577
============ ============ =========== ============ ============
Year to 31 Year to 31
December December
2015 2014
US $ 000's US $ 000's
(Loss)/profit before tax
Trading (8,917) 2,542
Cement operations 669 -
Investment portfolio 676 784
Head office costs (1,788) (1,320)
Exceptional items - (904)
(9,360) 1,102
=========== ===========
Geographical split of Total income for the Group where >
10% per region
Year to 31 Year to 31
December 2015 December 2014
US $ 000's US $ 000's
Turnover Turnover
Eastern Asia 1,035,593 2,042,216
Western Asia 533,706 286,480
Other 328,229 556,373
Major customers of the Group where individually >10% of
Total income
Year to 31 Year to 31
December 2015 December 2014
US $ 000's US $ 000's
Customer Customer
Customer A 302,002 144,293
Customer B* 12,969 432,878
Other 1,582,557 2,307,898
* Customer B is < 10% during for the year ended 2015
Year to 31 Year to 31
December December 2014
2015
US $ 000's US $ 000's
Investment portfolio losses
represents:
Unrealised gains on financial
assets
designated at fair value 676 766
Realised gains on financial
assets designated at fair
value - 18
676 784
=========== ===============
Year to 31 Year to 31
December December 2014
2015
US $ 000's US $ 000's
Total assets
Trading 336,194 436,565
Cement operations 82,170 -
Investment portfolio 179 328
Head office 144 3,445
----------- ---------------
418,687 440,338
=========== ===============
Total liabilities
Trading 322,863 410,951
Cement operations 38,538 -
Investment portfolio - 1
Head office 3,859 239
----------- ---------------
365,260 411,191
=========== ===============
Year to 31 Year to 31
December December 2014
2015
US $ 000's US $ 000's
Depreciation:
Trading 93 52
Cement operations 342 -
Investment portfolio - -
Head office - -
435 52
=========== ===============
3. Earnings per ordinary share
The calculation of the basic earnings per share is based on the
earnings attributable to ordinary shareholders divided by the
weighted average number of shares in issue during the year,
excluding shares held in the Employee Benefit Trust on 31 December
2015 of 6,259,046 (2014: 6,259,046), Treasury shares on 31 December
2015 of 4,500,058 (2014: 4,500,058) and Non-treasury shares on 31
December 2015 of 28,812,192 (2014: nil).
The calculation of diluted earnings per share is based on the
basic earnings per share adjusted to allow for the issue of shares
through the share option schemes on the assumed conversion of all
dilutive options.
Reconciliations of the earnings and weighted average number of
shares in the calculations are set out below. Diluted earnings per
share has not been calculated as the Group is loss making.
The (loss)/profit attributable to the owners of the Company for
continuing operations used in the calculation below is that
presented in the consolidated statement of comprehensive
income.
Year to 31 Year to 31
December 2015 December
2014
US $ 000's US $ 000's
Continuing operations
(Loss)/profit attributable
to shareholders (7,324) 518
Diluted (loss)/profit attributable
to shareholders (7,324) 518
Weighted average number of
shares 189,044,366 100,602,104
Dilutive effect of convertible 66,675,000 -
loan notes and warrants
Basic earnings per share US
$ cents (3.87) 0.51
Diluted earnings per share
US $ cents (3.87) 0.51
4. Financial assets and liabilities at fair value through profit
or loss
Year to 31 Year to 31
December December
2015 2014
US $ 000's US $ 000's
Financial assets at fair value
through profit and loss - derivatives 7,316 18,669
Investments:
Unlisted investments 179 3,264
----------- -----------
7,495 21,933
=========== ===========
Financial assets at fair value (2,675) -
through profit and loss
- convertible loan derivatives
----------- -----------
During the year, Ambrian Metals Limited and CGM merged pursuant
to a "merger by absorption" governed by Swiss law. The unlisted
investment in CGM was valued at $3.61 million based upon the
transaction with Ambrian plc. As part of the merger, Ambrian plc
issued shares to CGM shareholders which resulted in "Non-treasury"
shares being recorded by Ambrian plc for shares owned in itself,
disclosed as "Other reserves".
All amounts presented in respect of unlisted securities have
been determined with reference to financial information available
at the time of the original investment updated to reflect all
relevant changes to that information at the reporting date. This
determination requires significant judgment in determining changes
to fair value since the last valuation date. In making this
judgment the Board evaluates, among other factors, changes in the
business outlook affecting a particular investment, performance of
the underlying business against original projections and valuations
of similar quoted companies and the most recent fund raise achieved
by the investee company.
Financial assets at fair value through profit or loss represent
commodity futures. These are used to hedge inventory of metals, and
purchases and sales of metals. Hedges take into account both
contango and backwardation market conditions and are marked to
market at the year-end closing price.
5. Non-controlling interest
The non-controlling interest ("NCI") disclosed in the
consolidated statement of comprehensive income and consolidated
statement of financial position at 31 December 2015 is represented
by
Names of entity with Cimentos da
NCI Beira
Principal place of
business of subsidiary Beira, Mozambique
Proportion of ownership
held by NCI 20%
Proportion of voting
rights held by NCI 0%
Profit/(loss) attributed
to NCI in US $ 000's 252
Accumulated NCI value
at in US $ 000's 7,197
Dividends paid to NCI -
The 20% economic interest in Cimentos da Beira ("CdB"), is held
by the Industrial Development Corporation of South Africa Limited
("IDC") by means of a convertible loan agreement whereby the IDC
has an option to subscribe for 20% of the issued share capital of
CdB.
Refer to the Segmental analysis, note 2 above, for the breakdown
of assets and liabilities relating to CdB.
A 20% minority interest in Ambrian Resources AG held by
shareholders other than Ambrian plc.
6. Business combination of Consolidated General Minerals
(Schweiz) AG
On 17 February 2015, Ambrian announced that it had entered into
a conditional agreement relating to the merger of Ambrian's Swiss
subsidiary, Ambrian Metals Limited, with CGM Schweiz (which owns a
newly constructed cement manufacturing plant in the port of Beira,
Mozambique), pursuant to a 'merger by absorption' process governed
by Swiss law and a subsequent acquisition by Ambrian plc of the
shareholding of Consolidated General Minerals Plc (now in
liquidation) ("CGM") in the resulting Swiss merged entity, together
with all the indebtedness of the CGM Schweiz Group owed to CGM.
On 6 March 2015 the deal was approved by a majority shareholding
of both entities, and by 27 March 2015 the deal was declared
unconditional with all conditions precedent having been met. This
is considered the acquisition date. On the same day two directors
of CGM were appointed to the board of Ambrian plc, Robert Adair
(now Chairman) and Jean-Pierre Conrad (now Chief Executive
Officer).
The merger serves a strategic purpose in diversifying Ambrian's
revenue stream. The Group will now have an operating asset, and has
further exposure to the fast growing and developing market of
Mozambique. Further it helps increase Ambrian's shareholder base,
and consequent prospects of additional liquidity in share trading
and improving the Group's profile with institutional investors.
We previously announced the details of the transaction with CGM
and the combination of our businesses. This is the first reporting
period for which we report on the combined businesses including the
cement plant in Mozambique, owned by CdB. The directors have
considered how this transaction should be accounted for and having
reviewed the criteria, have determined that it should be accounted
for as a business combination.
Details of the fair value of identifiable assets and liabilities
acquired (excluding the holding in Ambrian plc previously held by
CGM), and purchase consideration is as follows:
Book value Fair value Fair value
at 31 March uplift at at 31 March
2015 31 March 2015
2015
US $ 000's US $ 000's US $ 000's
Property, plant and
equipment 40,132 26,174 66,306
Land 768 - 768
Trade and other receivables 2,659 - 2,659
Cash and cash equivalents 424 - 424
Loan and overdraft
facilities (25,151) - (25,151)
Trade and other payables (1,938) - (1,938)
Deferred tax liability - (7,582) (7,582)
Non-controlling interest - (6,944) (6,944)
------------- -------------------- -------------
Total net assets 16,894 11,648 28,542
============= ==================== =============
Fair value of consideration
payable
No. of Convertible At 31 March
Securities 2015
US $ 000's
Initial Convertible Securities
(converted) 165,020,739 28,521
Second Tranche Deferred Convertible
Securities 9,707,102 1,678
Total consideration 174,727,841 30,199
------------------------ --------------
Less Investment acquired in Ambrian plc
previously held by CGM (1,657)
28,542
==============
The value applied to the equity to be issued is based on Ambrian
plc's closing price (11.62 pence) and USD closing exchange rate
(USD/GBP 1.4874) on the day the transaction completed (27 March
2015).
Details of the Convertible Securities in relation to the
merger
The 165,020,739 Initial Convertible Securities of GBP0.01 each
in Ambrian plc were issued on 8 May 2015, as anticipated and upon
their immediate subsequent distribution to CGM shareholders,
automatically converted into 165,020,739 Ordinary Shares in Ambrian
plc.
The 19,414,205 First Tranche Deferred Convertible Securities of
GBP0.01 each in Ambrian plc were also issued on 8 May 2015 but
(notwithstanding their immediate subsequent distribution to CGM
shareholders) were not converted into Ordinary Shares in Ambrian
plc, as the condition for such conversion (mechanical completion of
the Beira cement plant) was not satisfied by the long stop date for
satisfaction of that condition (15 May 2015) - and so automatically
on that date converted into 19,414,205 special deferred shares of
GBP0.01 each in Ambrian plc.
The 9,707,102 Second Tranche Deferred Convertible Securities of
GBP0.01 each in Ambrian plc were also issued on 8 May 2015 and, in
accordance with their terms, will as a result of their immediate
distribution to CGM Shareholders convert into 9,707,102 Ordinary
Shares in Ambrian plc conditional upon the final dissolution of
CGM.
Details of the Non-treasury shares in relation to the merger
As a result of the merger, Ambrian plc now holds $4,980,000
shares in itself, $1,657,000 through shares held directly by CGM
(as noted above) and $3,323,000 through Ambrian plc's holding in
CGM plc which was acquired through the issue of Ambrian plc shares.
These shares are held as non-treasury shares and are required by
law to be sold or cancelled in the future.
Refer to note 2 above for the profit contributed by the cement
operations segment since acquisition.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR LLFSRREIDIIR
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June 08, 2016 02:00 ET (06:00 GMT)
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