Obtala Resources has entered separate agreements with three independent, international timber-focused investors to secure an investment of about USD3m for its forestry division in return for minority equity interests and certain off-take rights over specified Mozambique forest concessions.
Deputy chairman Kevin Milne commented:
“This investment allows us to materially progress our forestry business in Mozambique. It ensures that Obtala retains a strong balance sheet without the requirement to issue equity or relinquish material interests in the forestry business which we value highly.
“We now look forward to bringing forward revenues through access to new international export markets that were not previously open to us.
“More specifically, Basic Materials Ltd, an off taker and investor, which is based in Hong Kong, Shanghai and Russia, affords a route to these valuable markets.
“Whilst, the creation of the distribution centre in Maputo will provide direct access to local consumers on both a wholesale and retail basis.
“Finally, this investment will ensure we can invest in the labour, health and education programmes in Mozambique and ensure we can contribute socially in our host country. We look forward to advising shareholders on the roll out and delivery of the business plan.”
Source: Interactive Investor