Cambium Global Timberland Limited 3R Release of Mortgages & Loan Agreement (1331A)
December 21 2017 - 10:05AM
UK Regulatory
TIDMTREE
RNS Number : 1331A
Cambium Global Timberland Limited
21 December 2017
21 December 2017
Cambium Global Timberland Limited (the "Company")
3R Properties Release of Mortgages, and associated Loan
Agreement
The Company announces that it has today entered into a
settlement agreement with Banco da AmazĂ´nia S.A. ("BASA) to remove
the mortgages over the company's 3R property in Tocantins State,
Brazil.
The mortgages pre-dated the Company's acquisition of 3R, and
remained in place as part of the purchase deal negotiated by the
Company's investment managers at the time. The mortgages were
counter-balanced by a limited indemnity in favour of the Company
over the vendors' properties at Lizarda.
The liability to BASA under the mortgages has been crystallised
at a total cost to the Company in the region of GBP1,413,874,
including fees and legal expenses, significantly lower than the
balance sheet provision of GBP4,604,278 (Note 16, Financial
Statements to 30 April, 2017). The transaction enables the Company
also to remove the previous provision for the sum of GBP235,226
(R$967,719) withheld from the purchase price at the time Cambium
bought 3R subject to the mortgages. Closing the settlement
transaction is subject to the procedural requirement of
ratification by the Court in Tocantins, in relation to which the
Company is advised there is no material risk. The Company intends
to pursue the enforcement, as a set-off against its crystallised
liability to BASA, of its rights of indemnity against the Lizarda
properties.
The Company also announces that financial support for the
release of the mortgages, enabling the Company to avoid depleting
existing cash balances, was provided by the Company's largest
shareholder Peter Gyllenhammar AB ("PGAB"), by way of an unsecured
loan funding facility for up to GBP1.4m to cover the settlement and
related costs (the "Loan"). The interest rate is 6% for the first
12 months and thereafter 8%. PGAB has agreed not to have recourse
against the existing cash balances. There is no specified repayment
date (and consequently no default interest rate) and the Company is
only required to repay the Loan or pay interest out of cash flow
from the land and/or timber assets presently held in Brazil which
is surplus to requirements. The loan agreement contains borrower
covenants requiring lender consent for the Company to return to
shareholders in excess of approximately GBP2,000,000 of the cash
presently held, to purchase own shares for more than 12p per share,
to declare or pay any dividend, or to make any significant new
investment (not including asset maintenance or repair costs).
The Board sees the removal of the BASA mortgages as a positive
step towards the eventual disposal of 3R in line with the Company's
stated investment strategy.
As PGAB holds 28.82% of the Company's issued share capital, the
Loan constitutes a related party transaction for the purposes of
the AIM Rules for Companies. The Directors consider, having
consulted with WH Ireland Limited, Nominated Adviser, that the
terms of the Loan are fair and reasonable insofar as the Company's
shareholders are concerned.
For further enquiries please contact:
Chairman
Tony Gardner-Hillman
01534 486980
Broker and Nominated Adviser
WH Ireland Limited
James Joyce/Alex Bond
020 7220 1666
Sub-Administrator and Delegate Company Secretary
Praxis Fund Services Limited
Matt Falla/Poppy Tolcher
01481 737600
Inside information
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014). Upon the
publication of this announcement via Regulatory Information Service
this inside information is now considered to be in the public
domain.
LEI: 213800YGRM8HG1S74M46
This information is provided by RNS
The company news service from the London Stock Exchange
END
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