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Fox Marble signs distribution deal for Gulf states

The quarries operator is also planning to raise around £2.9mln to retire some debt and boost working capital
Patil has successfully built businesses and brands, but his background is as an engineer working on marble projects

Marble quarries operator Fox Marble Holdings PLC (LON:FOX) has signed a sales and purchase agreement covering the Gulf Cooperation Council (GCC) nations.

The three-year agreement with Shailesh Patil is subject to a minimum commitment of 3,000 tonnes of marble a year and confers upon Mr Patil the exclusive rights to sell Fox Marble's product in Oman, Qatar, Saudi Arabia, Bahrain, Kuwait and the United Arab Emirates.

READ: Fox Marble looking to expand production facilities to meet burgeoning demand

Fox Marble said the minimum commitment under the agreement equates to roughly €600,000 to €800,000 a year.

Patil will make an initial payment of £50,000 within the next 14 days and then follow that up with a payment of £450,000 within 90 days of the agreement being signed.

“This agreement clearly demonstrates not only the international recognition of our marble but also our continued ability to deliver large block orders, as demand increases and we expand into new markets," said Chris Gilbert, the chief executive officer of Fox Marble.

With the increased profile comes a need to up production capacity, and Fox Marble is planning to raise around £2.89mln through a share issue and the issue of convertible loan notes.

The company expects to raise £759,750 by placing shares at 10.5p a pop; a further £2mln or so through a share subscription at the same price to Kesari Tours – a travel company founded and run by the aforementioned Shailesh Patil - and £235,000 through the issue of convertible loan notes.

Proceeds are intended to be used to fund the expansion of production capabilities at Fox Marble's quarries and factory, retire existing debt obligations and provide the company with additional working capital as demand increases as it continues to develop sales channels.

In addition, the company intends to discharge £783,000 of the company's outstanding loans and other liabilities by the issue of a further 7.46mln shares to certain directors and to Brandon Hill Capital. 

READ: Fox Marble gives thanks for sales to USA and Turkey

"Fox Marble's long-term strategy is to become a major international supplier of high-quality marble blocks and processed marble products from the company's own processing facility based in Lipjan, Kosovo,” Gilbert said. 

"The funds raised will considerably strengthen our position, enabling us to deliver on our plans for sustained growth, as we look to accelerate the development of our quarries and processing capabilities. We now enter 2018 well-placed to meet the expected demand for our products and look forward to updating the market in due course," the chief executive added.

Shares in Fox Marble closed last night at 10.69p.

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Fox Marble Holdings PLC Timeline

January 03 2018

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