Home » Industry » Cambria Africa Engages Major Shareholder for Cash Injection

LONDON-listed Zimbabwe-focused investment holding company Cambria Africa Plc has engaged majority shareholder Ventures Africa Limited for fresh funding to end a severe cash crunch that has constrained operations. The company, listed on London’s junior market known as the Alternative Investment Market, said its operations had been affected by a number of factors including difficult domestic economy and sale of a major asset below budget.

“As previously announced on 26 March 2015 and in the company’s circular of 23 January 2015, Cambria activities have been constrained by a number of factors, including a shrinking Zimbabwean economy and the sale of the Leopard Rock Hotel at a price well below management’s expectations,” said Cambria.

“The company’s working capital is tight and is being carefully managed and is reliant beyond the short term on raising further funds.

“The company is in discussions with Ventures Africa Limited (‘VAL’), which holds 50,5 percent of the issued share capital regarding the provision of further funds,” Camnria added.

In the meantime, VAL has provided Cambria with a $1,1 million standby facility to be used as security for costs in connection with on-going litigation against Lonrho, which used to operate the Zimbabwe assets Cambria bought.

If the standby facility is used, the funds made available there under will be owed by Cambria to VAL and, if not settled immediately by Cambria, VAL and the company will negotiate the terms and security of the debt at that time.

The AIM-listed company provided the update to its recent trading as well as update to its financial position further to the closing of the recent subscription for shares on April 13 2015 that raised approximately $1,3 million.

The proceeds of the recent placement were used to cover the significant costs in relation to legal fees to the ongoing litigation against Lonrho, Cambria group overhead, and working capital for the company’s existing investments.

During the first half of the financial year in relation to the six months ending February 28, 2015 Payserv achieved $2,64 million in revenues, compared to $2,19 million achieved for the same period last year.

During the same period, Payserv saw an increase in EBITDA of 34 percent over the prior year’s first half performance and achieved a profit before tax (PBT) in excess of PBT for the full financial year of Payserv ended August 31 2014.

Millchem achieved $3,10 million of revenues over the period, compared to $2 milion for the same period last year, a 55 percent year-on-year increase in revenues.

EBITDA and profit before tax losses for Millchem for the first half only slightly improved from the results for the full year ended August 31 2014, as the company continued to heavily invest into regional expansion, away from Zimbabwe, and into broadening its offering with various new suppliers.

Trading in Cambria’s shares was suspended from February 17, 2015, pending publication of audited 2014 full year results for the 12 months ended August 31 2014.

Pursuant to the AIM rules for companies, the admission of the company’s shares will be cancelled if the company’s shares are not restored to trading by the August 17, 2015.

Consequently, Cambria will need to have published both audited 2014 full year results for the 12 months ended August 31, 2014, and 2015 interim results for the six months ended February 28, 2015, by that date.

Source : The Herald