Woodbois Limited Company Update (4365Q)
19 Junio 2020 - 1:00AM
UK Regulatory
TIDMWBI
RNS Number : 4365Q
Woodbois Limited
19 June 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.
19 June 2020
Woodbois Limited
("the Group" or "the Company")
AIM "WBI"
Conditional Debt and Balance Sheet Restructuring
Updated Strategy
Gabon Sawmill Operations Recommence
The Company is pleased to provide the following update regarding
operations, strategy and its proposed balance sheet
restructuring.
Proposed Debt and Balance Sheet Restructuring
Discussions with the majority holder of the Company's 2024
convertible bonds ("Convertible") have continued, and the Company
is pleased to have now reached an agreement in principle with the
major bondholder such that not less than 75% of the $30 million
notional outstanding of the Convertible will be exchanged into
voting and non-voting equity and with the balance restructured into
a zero coupon convertible bond. Such agreement in principle will be
conditional upon the Company raising additional equity and
finalisation of the definitive legal documentation to enable it to
continue to build on the substantial investments made over the last
couple of years and is intended to hasten sustained positive
operating cash flow.
The Company has initiated discussions with the majority holders
of its internal trade finance facility ("ITF"). Lombard Odier,
which is both a substantial shareholder and holder of approximately
$5.5m of the ITF, has indicated its ongoing commitment to the
business by agreeing, subject to final terms to be a cornerstone
investor in the planned equity fundraise, which itself will be of
sufficient quantum to right size the balance sheet and unlock
material growth. The discussion with other holders of the ITF are
continuing and the Company is intending to have completely retired
the ITF as part of the planned restructuring and fundraise.
Further announcement regarding the restructuring and potential
equity fundraising will be made in due course.
Updated Strategy
At this stage the Company expects to prioritise additional capex
of c$3-5 million to increase the capacity at its existing
operations in Gabon and in particular increase its veneer
production, which is intended to increase current gross production
capacity by approximately a further 50% whilst materially improving
its gross margin from 24% achieved in 2019. The Company also
intends to materially expand its trading operations where it
believes it can become a leading operator through its extensive
network and deployment of proprietary trading technology. Since May
the Group's operations in Mozambique recommenced and are operated
under an agreement whereby profits are shared 50:50 with it having
no cash funding obligation. To date operations have progressed as
expected and the Directors are pleased with the development
plans.
The Directors believe that sustainable forestry and the
production of sawn timber and veneer is a market with strong
structural support, underpinned by population growth in our target
markets. Capturing a fraction of the African Export Market which is
estimated to be worth over $4billion pa is expected by the
Directors to enable Woodbois to deliver on its ambitious growth
targets.
The current crisis has exaggerated the scarcity of capital
available to support the production cycle, and Woodbois believes it
would be ideally placed to increase not only its own sustainable
production but to source and secure dedicated third party supply
throughout West Africa without the operational constraints to
growth that proprietary production can face when scaling up.
The Directors believe that timber is the perhaps last natural
resource largely unrepresented on global exchanges or capital
markets. The Directors believe that Woodbois' restructured balance
sheet will provide a fundamental step towards a leading position
within a sector suitable for consolidation and disruption through
the introduction of innovative sales and trading technology for
sustainably sourced and traceable timber which the Company is
developing.
In recent weeks management has met a broad range of investors
with a view to raising awareness of Woodbois, the sustainable
nature of its operations and the opportunity to deliver very
significant growth with the appropriate balance sheet and access to
capital to develop its production and trading businesses. Whilst
the Company's plans and the ultimate shape of the restructuring are
not yet finalised and as such there is no certainty that the
restructuring and an injection of further equity will proceed, the
Directors are optimistic that potential and existing stakeholders
share a vision of the relevance of a well-funded, sustainable
timber business listed on the London Stock Exchange. The Directors
believe that with ESG (Environmental, Social and Governance)
considerations throughout the natural resources sector increasingly
becoming front and centre of investors' asset allocation thought
process, the sustainability-driven Woodbois business model should
expect to receive recognition from a broad and growing set of
stakeholders.
Gabon Sawmill Operations Recommence
Further to the announcement on 11(th) June 2020 where it was
announced that timber harvesting had restarted, the Company is
pleased to confirm that sawmill operations have recommenced in
Gabon. Throughout the current pandemic, the welfare of our staff
has been a key priority: the Company is one of the largest
employers in the town of Mouila in Gabon, and the ability to
restart operations provides a vital lifeline for many of the
Company's loyal staff and the community. With exports continuing
through the port in Libreville, the Company looks forward to
increasing the number of workers permitted on site as government
covid-19 guidelines further evolve.
Enquiries:
Woodbois Limited
Paul Dolan - Chairman and CEO
www.woodbois.com
+44 (0)20 7099 1940
Canaccord Genuity (Nominated Adviser and Broker)
Henry Fitzgerald-O'Connor
James Asensio
Thomas Diehl
+44 (0)20 7523 8000
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END
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