Business
Debt facility and Related Party Transaction
Debt facility and Related Party Transaction.
About this update from Pacsco Limited
[{"type":"text","content":"\n\n14 June 2023\nAgriterra Limited ('Agriterra' or the 'Company')\nAgriterra Limited / Ticker: AGTA / Index: AIM / Sector: Agriculture\n \nUS$1.9 million debt facility and Related Party Transaction\n \nAgriterra Limited, the AIM-quoted African agricultural company, is pleased to announce that its wholly-owned subsidiary, Desenvolvemento E Comercializacao Agricola Limitada (\"DECA\") has secured a US$1.9m working capital facility (the \"Facility\") from First Capital Bank, S.A. (the \"Bank\") to enable it to finance and support its maize buying operations (the \"Financed Maize\"). The Financed Maize will be processed and sold by DECA from its facilities in Chimoio, Mozambique into the local wholesale, retail and NGO markets.\n \nThe material terms of the Facility from the Bank are as follows:\n· Revolving overdraft facility equivalent to US$1.9 million (in Mozambican Metical) until June 2024\n· Interest rate set at the prime lending rate (Mozambique Central Bank) plus 0.5%, which is equivalent to 24%.\n· Arrangement fees and commission of 1%.\n \nCaroline Havers, Non-Executive Chair, said: \"We are delighted to have secured this financing and repeated support from First Capital Bank. This will enable us to benefit from a strengthened purchasing position and set up our maize operations for a successful trading, processing and sales season. We also thank our majority shareholder, Magister Investments Limited, for their support in providing the cash backed guarantee which secures the facility, which demonstrates their ongoing commitment to and faith in our operational plans and management team.\"\n \nFurther Details on the Facility\nAs a condition to providing the Facility, the Bank required that the Company provide a cash backed guarantee (equal to 110% of the size of the Facility) as security (the \"Bank Security\"). In order to satisfy this condition, the Company has entered into an agreement with Magister Investments Limited (\"Magister\"), the Company's 50.58 per cent. shareholder, pursuant to which Magister has agreed to provide the necessary security (the \"Magister Guarantee\").\n \nThe material terms of the Magister Guarantee are as follows:\n \n· Agriterra will be liable to pay Magister a fee of 1.75% of th...