6 Oct 2009 07:00
BioEnergy Africa Ltd / Index: AIM / Epic: BAL / Sector: Renewable Energy
6 October 2009
BioEnergy Africa Limited ('BioEnergy Africa' or 'the Company')
Proposed Adoption of Investing Policy and Change of Name
The Directors of BioEnergy Africa today announce proposals to change the strategic direction of the Company. The Directors propose that the Company becomes an investing company for the purposes of the AIM Rules for Companies and adopts an investing policy to invest in early stage exploration and development projects focussing on mining assets in sub-Saharan Africa.
Background
In September 2008, the Company was admitted to AIM with the intention of developing the production of ethanol from sugar cane projects in southern Africa, having secured the rights to develop the Massingir project in Mozambique. Despite making progress with the development of this project, the Directors believe that the global economic climate and current reduced interest in non-carbon related fuel products will make it difficult for the Company to raise the necessary financing required under the Massingir Investment Agreement.
On 30 March 2009, the Directors announced a strategy review due to the worsening economic climate, which focussed on the reduction of overheads and the preservation of cash. As highlighted in the Company's annual report published recently, the Directors have continued to monitor the performance of the Company, in particular its ability to satisfy the US$510 million investment requirement under the terms of the Massingir Investment Agreement.
The Directors have now finalised their review of the Company's development plan and have concluded that the Company and its shareholders would benefit from a more fundamental change of strategy. To this end the Company intends to suspend further material investment in the Massingir Project, adopt the investing policy set out below and change its name to Sable Mining Africa Limited.
The adoption of the investing strategy and change of name require shareholder approval and a circular containing a notice convening a general meeting of the Company will be sent to shareholders shortly.
Investing Policy
The Company proposes to adopt the following investing policy:
The Company will consider acquiring or investing in early stage exploration and development mining businesses or assets located in sub-Saharan Africa. The investing policy is to acquire or invest in coal, platinum and/or uranium businesses or assets, although the Company will consider mining businesses or assets which focus on other metals or minerals, which in the opinion of the Board offer better value to shareholders.
The Company will focus on businesses or assets located in Namibia, Botswana, Zimbabwe and Zambia, although other locations in sub-Saharan Africa will also be considered if the Board consider those businesses or assets to be suitable for an investment by the Company.
The Company intends to be an active investor and will seek to add substantial value, both operationally and strategically, to the businesses or assets acquired or in which investments are made. The Company does not currently anticipate making minority investments but intends to focus on owning the whole or majority interests in a small number of businesses or assets.
The Company does not propose to set any duration on making or holding any investment and is not limited in time. There will be no proposed time limit for the Company to return funds to shareholders and the Directors would not anticipate returning funds to shareholders in the short to medium term.
In accordance with Rule 15 of the AIM Rules for Companies, the Company will have to make an acquisition or acquisitions which constitute a reverse takeover under Rule 14 of the AIM Rules for Companies, or otherwise implement the investing policy to the satisfaction of the London Stock Exchange, within twelve months of the adoption of the investing policy being approved by shareholders. If the Company does not do so its shares may be suspended from trading on AIM and may ultimately be cancelled from admission to trading on AIM.
The Directors have many years experience working with and for companies operating in Africa, with a particular focus on mining companies. They will use their extensive business contacts and knowledge to source the most attractive transactions and assess potential targets for acquisition or investment. It is anticipated that initial due diligence of any possible acquisition target will be carried out by the Directors who will seek specialist advice as they deem necessary.
The underlying objective of the Company is to benefit from early exposure to mining businesses or assets in under-developed locations, which have the potential to attract substantial foreign investment and which have the potential for rapid sustainable growth.
Change of name
The Company intends to change its name from BioEnergy Africa Limited to Sable Mining Africa Limited and a resolution will be put to shareholders at the general meeting to this effect.
Structure of the Investing Company
The Company is currently resident in the British Virgin Islands and intends to retain its current equity structure and not to become a closed-ended investment company.
There is currently no intention for the Company to appoint an independent investment manger and the Board of directors will consider investments for the Company to invest in. The Board currently comprises Phil Edmonds, Corne Holtzhausen and Andrew Groves all of whom have significant expertise in mining assets in southern Africa.
The Board will monitor the progress of its portfolio in light of any trends and developments within the sector. The Board does not intend to make regular periodic disclosures, such as a regular net asset value statement, as the Directors do not believe that the assets or businesses in which the Company intends to invest in are suitable for such periodic statements.
The Company's major shareholder is Ashendon Investments Inc. On 14 August 2009 the Company was notified that companies controlled by trusts, the beneficiaries of which include relatives of the Company's directors, Phil Edmonds and Andrew Groves, had acquired interests in the share capital of Ashendon Investments Inc. which itself has an interest in 136,680,000 ordinary shares in the Company, representing 41.1% of the Company's total issued share capital. The Board is accordingly not considered to be independent of Ashendon Investments Inc. which is a substantial shareholder in the Company.
A circular convening a general meeting at which proposals to adopt the investing policy detailed above and change the name of the Company will be sent to shareholders shortly.
** ENDS **
For further information please visit www.bioenergyafrica-ltd.com or contact:
| Jeremy Gray | BioEnergy Africa Ltd | Tel: 0854 108 6060 |
| Jonathan Wright | Seymour Pierce Ltd | Tel: 020 7107 8000 |
| Hugo de Salis | St Brides Media & Finance Ltd | Tel: 020 7236 1177 |
| Susie Callear | St Brides Media & Finance Ltd | Tel: 020 7236 1177 |