Obtala Limited (LON:OBT) has said its due diligence process for the acquisition of Nouvelle Scierie Moderne de Sassandra (NSMS) requires more sample data before the firm can deciding whether to proceed with the deal.
In a statement, the AIM-listed Africa-focused agricultural and forestry company said NSMS and Sidani Yahia Younes have agreed to extend the time period for serving notice to acquire 100% of the share capital of NSMS.
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Under the terms of the original announcement, made on 30 January 2018, Obtala, through Argento, has provided a US$845,000 loan to NSMS to pre-finance the production of timber in the Ivory Coast, repayable over 9 months from 31 March 2018, in return for exclusivity over this production.
Under the extended agreement, at any time up to 1 April 2019, Obtala can serve written notice via Argento to purchase 100% of NSMS' share capital. Should the acquisition not be pursued, the loan becomes repayable in full.
Miles Pelham, Obtala’s chairman, commented, "Deliveries from NSMS have commenced but our due diligence process requires more sample data before exercising or terminating our option to purchase 100% of NSMS share capital."
He added: "We are therefore delighted to have agreed the extension, for no additional consideration, and look forward to working with NSMS on the development on an integrated supply chain for their product throughout 2018."