UK-based Anglo African Agriculture (AAA) has announced plans to acquire the entire issued share capital of a number of companies within Kenyan marine and port logistics firm, Comarco Group after it signed conditional share purchase agreements on Monday.
The consideration will be Ksh 3 billion (US$ 30 million), payable in AAA new ordinary shares at 0.5p per share.
The companies are Consolidated Marine Contractors Limited (CMC); Comarco Properties (EPZ) Limited (CPL); Kenya Marine Contractors (EPZ) Limited (KMC); Touchwood Investments Limited (TIL) and Comarco Supply Base (EPZ) Limited (CSB).
“The Proposed Acquisition is subject, inter alia, to an equity fundraising, the publication of a prospectus and shareholder approval in general meeting,”AAA said in a statement.
It added that following a strategic review in 2018, AAA has been actively seeking to expand its activities beyond the agricultural sector while still utilising its directors’ experience and network in sub-Saharan Africa.
AAA announced on 30 August 2018 a proposed loan facility to Comarco Group to help fund its working capital which
was advanced to Comarco Group in November 2018. This was intended to be the first step in the diversification of AAA’s revenues and to significantly grow the business.
During the course of identifying means to restructure Comarco Group, the Proposed Acquisition as a solution became evident as a mutually beneficial opportunity to help grow both companies. Comarco Group requires access to capital markets to facilitate growth in its business, particularly in light of the current oil and gas and infrastructure development off the coast of East Africa and the increased opportunities for marine logistics companies that such development will bring.
In summary, the Proposed Acquisition would be in the best interests to both the shareholders of AAA and Comarco Group as it allows the Company to acquire a reputable port and marine logistics business at a strategic time when demand for such businesses have increased; Comarco Group has US Dollar based revenues and a strong asset base; Allows the Company to diversify and grow the revenue and income base; and allows Comarco Group wider access to capital should further funds be required for acquisitions or any future organic development beyond the Enlarged Group’s present plans.
It also increases the Company’s network of high level financial, government, industry, and technical relationships, to support the Company’s current and future activities, many of which are in emerging markets.
VSA Capital is acting as financial adviser and broker to AAA and will in due course be publishing equity research and conducting the equity fundraising following the publication of a Share Registration Document.
“In due course, the Company expects to publish a Prospectus in respect of the proposed re-admission of the shares of the
Enlarged Group (“Enlarged Group”) to trading. Subject to completion of the Proposed Acquisition, the Company intends to change its name to Agulhas Group Africa plc,” AAA said.
The Proposed Acquisition, if completed, would result in current AAA shareholders having a minority interest (expected to be less than 5%) in the Enlarged Group and would constitute a Reverse Takeover under the Listing Rules.
Simon Phillips, CEO of the Comarco Group: “We have been working with the AAA team and their advisers for many months now and quickly came to the conclusion that an RTO of AAA was a good opportunity to access capital markets to drive growth in the group”.
The Comarco Group was established in Mombasa in 1971 before expanding its range of activities and area of operations to working throughout the Indian Ocean and along the entire eastern Africa seaboard and interior.
Comarco operates throughout Asia and Africa providing services by sea and river, over beaches and on land to the oil industry, offshore and onshore projects, construction and logistics organisations .
