Obtala Resources raises funds to accelerate East Africa plans

Obtala Resources shares plunged Wednesday after announcing a subscription agreement to raise funds to boost plans in East Africa.

Obtala Resources shares plunged Wednesday after announcing a subscription agreement to raise funds to boost plans in East Africa.

The natural resources investment and development company will issue up to 13.13m new ordinary shares of up to 1.0p each to an institutional investor over three equal instalments in an effort to raise around £2.0m.

The first issue of around 4.37m shares at 14.85p per share will be issued Wednesday and the final instalment is due within 90 days.

Obtala will also issue around 4.37m warrants exercisable immediately at a price of 18.56p valid for four years, following the completion of the first.

Shares dropped 9.09% to 15.00p at 13:53.

The announcement comes after the company unveiled plans to develop a high-value horticultural business in Tanzania.

Groundnut planting has kicked off elsewhere in Tanzania and talks are underway for an off-take agreement for a specialist trader to purchase the crops and supply them to Asia at an indicated price of $1,200 per tonne.

"I am pleased to announce this funding into the company which will allow for the acceleration of our development plans in East Africa," said Chairman, Francesco Scolaro.

"As recently announced we are currently engaged in the process of planting groundnuts in Tanzania and actively working on our new horticultural project which is targeting high value, high margin crops close to the main export conduit in Tanzania to produce year round revenues through the use of best irrigation and farm management practices.

"Our group of companies remain debt free and we intend to use this funding to continue our move towards building a cash generating, highly attractive margin producing businesses."

RD

Recommended

Broker safety – your questions answered
Investment strategy

Broker safety – your questions answered

Cris Sholto Heaton answers more of your questions about the safety of stockbroker accounts
25 Mar 2020
How demographics affects stock valuations
Investment strategy

How demographics affects stock valuations

New research suggests that stock and bond valuations are driven by the age of the population – at least in the US.
24 Feb 2020
Do you own shares in Sirius Minerals? Here’s what you need to do now
Stocks and shares

Do you own shares in Sirius Minerals? Here’s what you need to do now

Mining giant Anglo American has proposed a cash takeover of Yorkshire-based minnow Sirius Minerals. Unhappy shareholders must decide whether to accept…
20 Feb 2020

Most Popular

Why we won’t see a house-price crash in 2021
House prices

Why we won’t see a house-price crash in 2021

Lockdown sent house prices berserk as cooped up home-workers fled for bigger properties in the country. And while they won’t rise quite as much this y…
18 Jan 2021
Prepare for the end of the epic bubble in US stocks
US stockmarkets

Prepare for the end of the epic bubble in US stocks

US stocks are as expensive as they’ve ever been. How can you prepare your portfolio for a bubble bursting?
18 Jan 2021
The best investment trusts to buy for 2021
Investment trusts

The best investment trusts to buy for 2021

Sectors ranging from emerging markets to student accommodation look poised to do well this year, says David Stevenson, as he picks the best investment…
19 Jan 2021