Africa : Obtala to boost its own forestry capabilities with 500,000 $ investment

Obtala Resources Ltd, African focused agricultural and forestry company, reached two separate agreements with a High Net Worth investor and with its own Chairman Miles Pelham, for a total of 500,000 US$ inward investment for forestry production capabilities enhancement.

"This important investment enables further expansion of our production capabilities at a time when timber orders are robust and in quantities that exceed our current capacity by several multiples”, Miles Pelham, Chairman and CEO commented.

Mr. Miles Pelham and the Hong-Kong based investor brought in, each, 250 000 US$ through an existing Meradell (2) Ltd investment vehicle, the company said in a release on June 30.

The proceeds should be received within 30 days and “will be used to further develop production capabilities within the Forestry division by building additional drying units and investing in other operating machinery”, the company explained.

In consideration of the founding, Mr. Pelham and the High Net Worth investor will acquire, respectively, economic benefit of 714 and 833 hectares.

The company explained that these will be carried out through respective shareholding of 1.42% and 1.67% in Meradell (2) Ltd, under conditions among which the right to put the investment back to Obtala, from 1st July 2021, for the nominal US$250,000 amount invested, payable in cash.

The AIM listed company, investing in and developing a fully vertically integrated business solution, is focused on sub-Saharan Africa and has operations in Tanzania, Mozambique and Lesotho.

Obtala Resources Ltd currently posses 1,700 hectares of land under separate lease agreements for farming and was valued 310 million US$ on June 2014 based on NPV cash flow over 270,000 ha in 3 locations.