Woodbois Limited (LON:WBI), formerly known as Obtala, has raised around £960,000 from its institutional investor, Lombard Odier, as it also amended an agreement relating to the sale of its Tanzanian agricultural business.
The forestry and timber firm said Lombard had subscribed for 16mln new shares at a price of 6p each, an 12% discount to its close price on Tuesday, taking its stake in Woodbois to 25.01%.
The funds would be allocated towards the group’s plan to buy the 25% stake of its subsidiary Montara Continental Limited that is currently owned by partner firm Africa Resource Investment Ltd (ARI), which once completed will take its ownership to 100%.
ARI is solely owned by Patrick Green who was an employee of Obtala between June 2011 and September 2018. He was most recently the company’s head of forestry for Mozambique.
Amended deal to sell agricultural business
Woodbois also said that it had amended a deal to sell its Tanzanian agricultural business to its partner Envision Consulting (T) Limited.
Under the new agreement, Woodbois had adjusted the purchase price due to US$2,015,097.62 in return for Envision taking on an intercompany loan of US$484,902.38 upon acquiring the business.
This would leave the aggregate amount payable to US$2.5mln, which was initially agreed, with the first instalment of US$250,000 due on 30 April 2019.
Paul Dolan, Woodbois chief executive, said the agreements marked “yet another significant milestone in the comprehensive restructuring of the group organisation”.
“With a streamlined structure, a much-strengthened balance sheet and the ability to focus squarely on core activities in which we not only intend to compete profitably, but to excel, I am confident that the Group will deliver growth in 2019 and consistently into the next decade."
Woodbois had initially revealed the restructuring plans in January as part of a strategy to focus on the expansion of its timber operations, particularly in West Africa.
In early trading Wednesday, Woodbois shares were down 1.5% at 6.75p.