Obtala Resources raises funds to accelerate East Africa plans

20th Feb 2013 13:45

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