TIDMCRV
RNS Number : 7151O
Craven House Capital PLC
23 August 2017
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
Craven House Capital plc
("Craven" or the "Company")
Publication of Circular & Notice of General Meeting
Transfer of Brazilian land holdings to DLC Holdings Corp. (the
"DLC Transaction")
Convertible Debenture agreed with Global Emerging Markets
Group
Repayment of Loan received
Craven House Capital plc (AIM: CRV) announces that it has agreed
terms regarding the proposed transfer of its shareholdings in
Ceniako Ltd ("Ceniako") and Craven House Industries Ltd ("CHI") to
Toronto Stock Exchange listed DLC Holdings Corp (TSXV: DLC) in
consideration for new ordinary shares in DLC Holdings Corp ("DLC").
DLC is an agricultural investment company, focused on owning and
operating farmland and integrated agribusinesses. The proposed
transaction is intended to unlock the value of the Company's
Brazilian land holdings.
The Company intends to transfer its 49% shareholding in Ceniako,
which owns, via a Brazilian subsidiary, a 1,973 hectare land parcel
in Caravelas, situated in the state of Bahia, Brazil.
Simultaneously, the 11.5% shareholder of Ceniako will also transfer
its interest to DLC on the same terms, resulting in DLC having a
60.5% controlling interest in Ceniako. The Company also intends to
transfer its 95% shareholding in CHI, which owns, via a Brazilian
subsidiary, a 500 hectare land parcel in Canavieiras, also situated
in the state of Bahia, Brazil.
These shareholdings will be transferred for a combined value of
$9,034,000 and are currently held on the balance sheet of Craven at
a value of $5,058,000. In consideration for the transfer, the
Company will receive 57,461,906 shares in DLC, representing a 68%
shareholding in DLC post-transaction. DLC and Craven share common
directors and shareholders. Upon completion, DLC will become a
majority-owned, publicly traded subsidiary of Craven House Capital
plc.
Under the AIM Rules for Companies, the DLC Transaction is deemed
a related party transaction. Consequently, the Independent
Directors of the Company, having consulted with SPARK Advisory
Partners Limited ("SPARK"), as Nominated Adviser to the Company,
consider this transfer to be fair and reasonable in so far as
shareholders are concerned. In providing advice to the Directors,
SPARK has taken into account the Directors' commercial assessment
of this related party transaction.
The Board believes that the proposed DLC Transaction will
provide a number of benefits to existing shareholders of Craven,
which are detailed further in a circular to shareholders (the
"Circular"), which is being issued today.
These benefits include:
-- A majority shareholding of DLC, which will in turn have majority shareholding in Ceniako.
-- A "pure play" agricultural investment vehicle, which will
provide investors access to a distinct asset class.
-- Control of a publicly listed company with securities, which
can be used as an acquisition currency for future acquisitions.
The Transaction constitutes a reverse takeover for DLC under the
policies of the Toronto Stock Exchange ("TSX"). Requisite
shareholder and regulatory approvals for the DLC Transaction will
therefore also be required in Canada before completion. These
include the approval of the DLC transaction by over 50% of the
non-related shareholders of DLC Holdings. DLC Holdings has already
received irrevocable undertakings from the required number of
non-related shareholders required for the transaction to
proceed.
The Transaction will also require approval by the TSX. The Board
of DLC Holdings is in the process of gaining this approval and sees
no reason why it will not be forthcoming. Approval of the TSX is
anticipated to be received in approximately four to six weeks from
the date of the Circular. In the event that this approval is not
granted by the TSX then the DLC Transaction will not proceed.
The Company also announces that it intends to appoint Grant
Thornton as its new auditors.
The Circular issued today contains a notice of a General Meeting
to be convened on the 7(th) September 2017. The resolutions to be
put to shareholders at the GM will propose the approval of the DLC
Transaction and the appointment of Grant Thornton.
A copy of the Circular can be found on the Company's website:
www.cravenhousecapital.com
Convertible Debenture with Global Emerging Markets Group
The Company also announces that it has entered into a zero
coupon convertible debenture with GEM Global Yield Fund, a member
of the New York based Global Emerging Markets Group ("GEM"). The
$800,000 debenture has a term of five years and is convertible into
a maximum of 200,000 shares of Craven. The debenture has been
issued in lieu of fees due to GEM in relation to the GBP30m stock
purchase agreement announced in November 2015.
Repayment of Loan
The Company also announces that it has received a partial
repayment against the loan portfolio acquired by the Company in
September 2016. A repayment of 21,663,537 South African Rand has
been received. The Company continues work with borrowers to extract
additional value from this portfolio of loans.
For further information please contact:
Craven House Capital Tel: 0203 286 8130
Plc
Mark Pajak
www.Cravenhousecapital.com
SI Capital Tel: 01483 413500
Broker
Nick Emerson
www.sicapital.co.uk
SPARK Advisory Partners Tel: 0203 368 3550
Limited
Nominated Adviser
Matt Davis/Mark Brady
www.Sparkadvisorypartners.com
About Craven House Capital:
Craven House Capital is a frontier and emerging market focused
merchant bank seeking value oriented long term investments. Craven
House invests in all segments of the capital structure in
partnership with local entrepreneurs and the local business
community. Craven House provides long term patient capital and is
often involved in restructuring, expansion and turn around
investments in crisis and transitioning economies.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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