Woodbois Limited Mozambique Agreement & Operations recommencement (7049G)
19 Marzo 2020 - 1:00AM
UK Regulatory
TIDMWBI
RNS Number : 7049G
Woodbois Limited
19 March 2020
19 March 2020
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 ("MAR"). With the
publication of this announcement via a Regulatory Information
Service, this inside information is now considered to be in the
public domain.
Woodbois Limited
("Woodbois", the "Group" or the "Company")
(AIM: WBI)
-- Recommencement of operations in Mozambique
-- Three year management agreement with no cash requirement from Woodbois
Woodbois, the African focused forestry and timber trading
company, is pleased to announce the signing of a management
agreement (the "Agreement") with Future Earth II LLC ("Future
Earth"), a US company with substantial concessions in Mozambique,
creating a relationship under which Future Earth will fund, manage
and operate Woodbois' Mozambique concessions, employees and
equipment, in order to produce sawn lumber and veneers to be sold
by Future Earth on a profit share basis.
The Woodbois concessions have been on a care and maintenance
basis for over two years, partly due to an industry export ban in
2018 and due to the quantum of investment required to restart and
to enlarge the operations to be able to earn an acceptable return
on capital comparable to the Group's other business segments.
Management have been seeking the optimum way to recommence
operations and believe the agreement with Future Earth provides
material benefits to both parties, not least from the economies of
scale arising from Woodbois' approximately 300,000 hectares and
Future Earth's approximately 620,000 hectares of concessions.
Since 2006, Future Earth has built sustainable industry
programmes in Mozambique. EAFP, its local subsidiary, processes
timber into lumber and finished products through its sawmill and
veneer manufacturing facilities in Mozambique. By operating these
facilities in-country rather than shipping semi-finished timbers,
the business captures a greater portion of the value chain locally,
creating more employment and reducing the carbon footprint of
finished goods. The business has multiple times received the
Presidential Award for "Best Exporter of Value-added Timber
Products" as well as the award for "Best Rural Industrialization
Project in Mozambique".
The Agreement is for 3 years, with optional breaks after 12 and
24 months at Future Earth's discretion. All costs during the term
of the Agreement will be funded by Future Earth with a 50:50
post-cost profit share from products sold from Woodbois'
concessions. Should Future Earth proceed with years 2 and 3 they
will pre-pay Woodbois $1 million each year, to be deducted from the
Woodbois share of profits for each respective year. Profits will be
distributed quarterly.
Woodbois CEO Paul Dolan said: "Woodbois and Future Earth share
strong sustainability values and I'm delighted to announce this
agreement which I believe will prove beneficial to both parties.
The agreement will allow Woodbois to start realising value from our
substantial assets in Mozambique without diluting management focus
or financial resources, which can now be fully concentrated on
bringing our operations in Gabon to optimal capacity and on our
international timber trading business. I hope that this signals the
start of a long and fruitful relationship between our respective
companies as well as our hardworking and dedicated teams on the
ground in Mozambique."
Lenny Shibley, industry veteran and Chief Operating Officer of
Future Earth, said: "In 30 years in the industry, I have seen no
better opportunity to deliver economic value, coupled with
step-change social uplift for local communities, than through the
environmentally responsible use of Mozambique's timber resource. We
very much look forward to further developing our relationship with
Woodbois as we add the management of their timber resource to our
operations."
Enquiries:
Woodbois Limited
Paul Dolan - CEO
www.woodbois.com
+44 (0)20 7099 1940
Arden Partners Plc (Nominated adviser and broker)
Richard Johnson
+44 (0)20 7614 5900
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END
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