Woodbois Ltd on Wednesday said it raised £6 million through a subscription of
1.20 billion shares at a price of 0.5 pence per share.
Shares in Woodbois were up 13% at 0.68p each in London on Wednesday morning.
The Africa-focused forestry, timber trading and afforestation company said 800 million subscription shares are being subscribed for by CHCH Ventures FZ-LLP and 400 million are being by purchased John Scott of Scott Group Ltd.
The subscription satisfies the cash shortfall of around $3.1 million created when the $6 million working capital facility was withdrawn by Sydbank in April.
Woodbois said the subscription will allow it flexibility to discharge its remaining obligations to Sydbank in full, and to benefit from the incentives for early repayment. The subscription forms part of a wider financing package, including a debt-for-equity swap of £1.8 million.
The company expects to have reduced its total debt to $5 million by June 30 from $15 million as at December 31.
On Wednesday, Woodbois also announced Chief Executive Officer Paul Dolan will step down from the role after a ‘suitable replacement has been found’. Dolan will become a non-independent non-executive director and will work on the initial phase of Woodbois’s afforestation project in Gabon with the carbon division.
Chair Graeme Thomson said: ‘Following the unexpected termination of our working capital facility in April, we are delighted to emerge from this challenging period with a vastly improved balance sheet. Our two new substantial shareholders both bring a welcome combination of high-level timber industry experience and access to a diversified pool of capital for our trading and carbon businesses.
‘The board wishes to place on record its thanks to Paul Dolan for his unstinting efforts in transforming the group’s activities and are pleased he will remain an integral member of the senior team’.
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