Obtala Resources to spin off timber business and list it on AIM

Obtala Resources has begun the process of spinning off its forestry division as it looks to list it as a separate company on AIM during the first quarter of next year.

The agribusiness, timber and retail company said it has reviewed a number of opportunities for the forestry division and concluded that it is in the best interest of its shareholders to spin it out in order for the significant inherent value to be recognised and to attract investors focused on the forestry sector.

Obtala said Honour Capital, a specialist forestry advisory and management company undertook a review of the new blocks and ascribed a net present value to the timber business of $161m.

Deputy chairman Kevin Milne said: “Placing these assets in a newly formed and listed entity with its own board will allow for the required focus on the execution of the growth plans, the expansion and further development of its supply chain and create a highly attractive and relevant opportunity for new investors.”

At 1140 BST, Obtala shares were 9.1% higher at 7.50p.