AFRI Afriag

4 November 2019

AfriAg Global PLC

(‘AfriAg’ or the ‘Company’)

Proposed Disposal, Capital Reorganisation and Amendment to Memorandum and Articles

Notice of General Meeting

The Company is pleased to announce that it has posted a notice convening a General Meeting (the “Meeting”) of the Shareholders to be held on 27 November 2019 at 11.00 a.m. at the offices of Hill Dickinson LLP, 105 Jermyn Street, St. James’s, London, SW1Y 6EE.

At the Meeting, the Company’s shareholders will be asked, amongst other things, to approve the disposal of the Company’s African operations, to convert the ordinary shares of £0.001 each to shares of no par value and to consolidate the shares on a 100:1 basis.

The circular and the Form of Proxy in relation to the General Meeting are being posted today, and the Circular will shortly be available for viewing on the Company’s website at www.afriagglobal.com.

The Directors believe that in order for the Company to proceed with the proposed acquisition of Apollon Formularies Limited the Company must dispose of its subsidiaries, which operates its African operations. As at 30 June 2019, the Company’s business has generated a loss of £865,000.

A copy of the Executive Chairman’s letter, the expected timetable of principal events and definitions sections contained in the circular, are set out in full below in this announcement without material amendment or adjustment.

The directors of the Company accept responsibility for the contents of this announcement.

-ENDS-

For further information on AfriAg Global please visit the www.afriagglobal.com or please contact;

AfriAg Global Plc:                                                                
David Lenigas (Executive Chairman)                   +44 (0)20 7440 0640

Peterhouse Capital Limited                     +44 (0)20 7469 0930
Guy Miller

LETTER FROM THE CHAIRMAN OF AFRIAG GLOBAL PLC

Directors:                                                                                                                           Registered Office:
David Lenigas                                                                                                                      Quayside House
Hamish Harris                                                                         6 Hope Street, Castle Town, Isle of Man, IM9 1AS
Donald Strang

4 November 2019

Dear Shareholder  

NOTICE OF GENERAL MEETING

1        INTRODUCTION

The Company announced on 16 May 2019 that it has entered into conditional subscription agreements with Apollon Formularies Ltd (Apollon) to subscribe for ordinary shares in Apollon and that it would need to raise approximately £1m to subscribe for a total of 4 million shares in Apollon, representing circa 2.325 per cent. of Apollon’s issued share capital (Subscription).

The Company announced on 24 May 2019 that it has raised £1,000,000 by a placing of 1,000,000,000 new Ordinary Shares with existing and new institutional investors at a placing price of 0.1 pence per Placing Share and announced on 15 July 2019 that the Subscription has been completed. 

Following completion of the Subscription the Company intends to seek shareholder approval for the proposed Share Capital Reorganisation and Disposal in line with its business strategy in order to proceed with discussions regarding the proposed acquisition of the entire issued share capital of Apollon as announced on 16 May 2019 (the Proposed Acquisition).

It is important that you complete, sign and return the Form of Proxy for use at the General Meeting enclosed with this document whether or not you intend to attend the meeting.

2        THE PROPOSED DISPOSAL

The Board believes that in order for it to proceed with the Proposed Acquisition it must dispose of its Subsidiaries, which operates its African operations. As at 30 June 2019, the Company’s business has generated a loss of £865,000. The Directors believe the market has not viewed the Company’s achievements with respect to its investments in its African operations favourably. Accordingly the Board intends to seek shareholder approval to dispose of the entire issued share capital (Sale Shares) of each of the Subsidiaries and transfer circa £626,000 inter-company debt due and owing to the Company to a third party buyer (Buyer). In consideration for transferring the Sale Shares to the Buyer, the Buyer shall indemnify the Company against all liabilities, costs, expenses, damages and losses (including but not limited to any direct, indirect or consequential losses, loss of profit, loss of reputation and all interest, penalties and legal costs (calculated on a full indemnity basis) and all other professional costs and expenses suffered or incurred by the Company arising out of or in connection with the: (i) Disposal; (ii) any claim by a third party against the Company arising out of or in connection with the provision of any services or supply of any goods  by the Company or the Subsidiaries; and (iii)  any claim made by a third party against the Company for death, personal injury, damage to property arising out of or in connection with defective goods or services supplied by the Company or the Subsidiaries.

3        THE PROPOSED CONVERSION INTO ORDINARY SHARES OF NO PAR VALUE

3.1     Conversion of Existing Ordinary Shares into New Ordinary Shares

The Company currently has 3,011,001,037 Existing Ordinary Shares in issue, which are listed on the NEX Exchange.  As at close of business on 1 November 2019 (being the latest practicable date prior to publication of this document) the closing price of the Company’s Existing Ordinary Shares were 0.09 pence. Under Isle of Man law, a company is unable to issue shares at a price which is less than the par value of the shares. Therefore the Company is unable to issue any further shares which places a significant constraint on raising further money. Shareholders will be requested at the General Meeting to approve the conversion of each Existing Ordinary Share into the same number of New Ordinary Shares. If such conversion is approved it will not alter the market value of a shareholder’s holding of shares in the Company’s capital or their economic interest in the Company.

3.2     New Articles

The Articles currently specify an authorised share capital of up to 1,000,000,000 of £1,000,000. The par value of the Existing Ordinary Shares is £0.001.

Under the Act the Directors may by resolution, subject to contrary provisions in the Articles, alter the Company’s share capital comprising shares with par value in any way. This power is restricted by Article 11 of the Articles which provides that the conversion of share capital into shares of a larger or smaller par value requires approval from shareholders by ordinary resolution. In order to enable the Company to raise new equity, the Board considers that an amendment to alter the Articles to remove the par value of the Existing Ordinary Shares is necessary. Set out in section A to this document is a non-exhaustive list of changes which have been to the Articles to alter them into the form of the New Articles.  In addition, shareholders may view on the Company’s website (www.afriagglobal.com) a copy of the Articles which have been marked up to highlight the changes being proposed.

4        THE PROPOSED CONSOLIDATION

Following the Conversion the Company will have 3,011,001,037 New Ordinary Shares in issue.  The Directors believe this is a large number of shares. The effect of the proposed Consolidation will be to reduce the number of Ordinary Shares in issue by a factor of 100, whilst increasing the trading price of the Company’s New Ordinary Shares. The Board considers the Consolidation is in the best interests of the Company and its Shareholders, as it believes the effect of the Consolidation will be to improve market liquidity by reducing the volatility and spread of the Company’s New Consolidated Ordinary Shares and make trading in the Company’s shares more attractive to a broader range of institutional investors and other members of the investing public. Following completion of the Consolidation 30,110,011 New Consolidated Ordinary Shares of no par value each, will be in issue.

One consequence of the proposed Consolidation is that Shareholders holding fewer than 100 existing Ordinary Shares will receive no new Ordinary Shares. This consequence is illustrated in the table below:

The Consolidation may result in fractional entitlements. These fractional entitlements will be aggregated to create single New Consolidated Ordinary Shares which will then be allocated by the Company.

To effect the Consolidation, it will be necessary to issue an additional 63 ordinary shares so that the Company’s issued ordinary share capital is exactly divisible by 100. These additional ordinary shares will be issued to the Company’s share registrar before the record date for the Consolidation. Since these additional shares would only represent a fraction of a New Consolidated Ordinary Share, this fraction will be sold or transferred pursuant to the arrangements set out below.

Where options and other rights have been granted in relation to the ordinary shares, the numbers of New Consolidated Ordinary Shares to which these rights apply will be adjusted to take account of the Consolidation.

Share certificates in respect of the New Consolidated Ordinary Shares, will be issued following the Consolidation or, in the case of uncertificated holders, Euroclear UK and Ireland Limited will be instructed to credit the CREST participant’s account with New Consolidated Ordinary Shares.

The record date for the Consolidation will be 6.00 p.m. on 27 November 2019. Subject to the passing of the resolutions at the General Meeting, CREST accounts will be credited on 28 November 2019 and new share certificates in respect of the New Consolidated Ordinary Shares are expected to be posted to certificated Shareholders in their new form within ten days of Admission.

5     INFORMATION ON THE COMPANY

Following the Disposal AfriAg will not hold any interest in any subsidiary company and will hold the following investments:

-     2.325 % of the issued share capital of Apollon; and

-     546 common stock in Tilray, Inc.

The Company will continue its investment strategy of investing in the legal medicinal cannabis sector.

6        GENERAL MEETING

Set out at the end of this Document is the Notice of General Meeting convening the General Meeting to be held at 11 a.m. on 27 November 2019 at Hill Dickinson LLP, 105 Jermyn Street, St James’s, London, SW1Y 6EE, at which the following resolutions will be proposed.

Resolution 1: Disposal

Resolution 1 is an ordinary resolution seeking shareholder approval of the Disposal.

Resolution 2: Adoption of New Articles

Resolution 2 is a special resolution seeking shareholder approval for the adoption of the New Articles.

Resolution 3: Conversion of Existing Ordinary Shares into New Shares (that is, shares with no par value)

Resolution 3 is a special resolution, conditional on the passing of Resolution 2, seeking shareholder approval for the conversion of each Existing Ordinary Share into the same number of New Ordinary Shares.

Resolution 4: Consolidation

This is an ordinary resolution, conditional on the passing of Resolution 3, seeking approval of the Consolidation.

7        ACTION TO BE TAKEN

A Form of Proxy is enclosed for use in connection with the General Meeting. Whether or not you intend to be present at the General Meeting, you are requested to complete, sign and return the Form of Proxy to the Company at Suite 3b, 38 Jermyn Street, London, SW1Y 6DN marked for attention of the company secretary, as soon as possible but in any event so as to arrive not later than 11 a.m. on 25 November 2019. The completion and return of a Form of Proxy will not preclude you from attending the meeting, or speaking and voting in person should you subsequently wish to do so.

8        RECOMMENDATION

The Directors consider that the resolutions set out in the notice of General Meeting are in the best interests of the Company and its shareholders as a whole and accordingly, unanimously recommend Shareholders to vote in favour of the Resolutions to be proposed at the General Meeting.

Yours faithfully

David Lenigas

Executive Chairman

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

DEFINITIONS

The following definitions apply throughout this document, unless the context requires otherwise: