Transaction Highlights:
- The international commodity trader Trafigura has agreed to substantially increase its stake in President pursuant to a subscription (the "Subscription") of US$6 million for 258,745,946 new ordinary shares in President at a price of 1.85 pence per share (the "Subscription Shares" and "Subscription Price" respectively). All subscription monies will be applied in fully repaying the remaining advances made by the Trafigura group to the Company and its subsidiaries (the "Group") referred to in President's announcement of 25 July 2019.
- IYA Global Limited ("IYA"), a company beneficially owned by Peter Levine, has stated that it intends, upon the passing of certain resolutions at a general meeting to be held on 22 June, to convert at least US$4.1 million of debt under the existing unsecured loan facility between IYA Global Limited and President ("IYA Loan Facility") into an amount of new ordinary shares in the Company (the "Conversion Shares") at a price of 1.85 pence per share (the "Conversion") that will enable Peter Levine (through his investment vehicles) to hold 29.95 percent of the Company's enlarged share capital. It is intended that the exact amount of debt to be converted will be determined following the closing of the retail offer described hereafter. It is also intended that the maturity date for the repayment of the relevant facility be extended until 31 December 2024
- The net effect of the Subscription and the Conversion will be to reduce net debt of the Group by a minimum of approximately US$10.1 million resulting in a reduction of at least US$16 million in the calendar year to date with third party financial debt (excluding IYA) now only US$3.7 million
- The Company is also raising up to US$3.1 million at a price of 1.85 pence per share by the placing of up to 134,611,399 new ordinary shares in the Company conditional upon the passing of the resolutions described hereunder (the "Placing")
- As part of the Placing, certain directors and employees in the Company are intending to subscribe for a total of 15,136,619 new ordinary shares in the Company
- In addition to the Placing, there will be an offer made by the Company on the PrimaryBid platform of new ordinary shares in the Company (the "Retail Offer Shares") at the Subscription Price (the "Retail Offer"), to provide existing shareholders and retail investors with an opportunity to participate. A separate announcement will be made shortly regarding the Retail Offer and its terms
- The Subscription, Conversion, Placing and the Retail Offer are conditional upon the passing of the resolutions (the "Resolutions") at the general meeting of the Company more particularly referred to later in this announcement
- Irrevocable undertakings amounting to approximately 35.6% of the Company's current issued share capital have been received in support of the Resolutions
- After the Subscription, the intended Conversion and the Placing but subject to the Retail Offer, Trafigura will hold approximately 18.3 per cent of the entire enlarged issued share capital in the Company and Peter Levine (through his investment vehicles) will hold 29.95 per cent
- The board of directors of the Company (the "Board") is proposing to obtain necessary shareholder approval, where required, to implement the above at a general meeting to be held on 22 June 2020 (the "General Meeting"). A circular will be published shortly (the "Circular"), setting out the details of the proposals and a notice of general meeting, and will be posted to shareholders.
Directors and employee participation in the Placing
Certain Directors and other employees (together, the "PDMRs") of the Company intend to subscribe directly with the Company for Placing Shares in the Placing at the Placing Price.
In addition, other employees intend to subscribe for a total of 3,481,215 Placing Shares.
The participation of the PDMRs in the Placing will (at the time commitments are entered into) constitute a related party transaction under AIM Rule 13.
Peter Levine, Chairman of the Company, commented:
"We are pleased that Trafigura has expanded their interest in the Company, thereby having a major interest in the future growth and success of our Group.
"In difficult times for our industry, there will always be those, perhaps the few, who rise to the challenge and come through it the better and stronger for it being able to grasp opportunities as they arise. President is now well placed to be one of those."
Martin Urdapilleta, General Manager Argentina of Trafigura commented:
"Trafigura is pleased to continue to expand its cooperation with President, whilst ensuring that the Company maintains a lean balance sheet and optimal cost structure.
"We believe that the current times, while certainly challenging for the entire industry, offer growth and consolidation opportunities as well and we are excited to cooperate with President, as we do with other producers in Argentina and other parts of the world, to support their future growth initiatives."
