United Cacao solvent until at least February

Peru-based cacao plantation company United Cacao updated the market on its funding situation on Thursday, saying that it has been exploring various funding options both to cover short term liabilities and for the medium-longer term to fully develop United Cacao's plantation estate.

The AIM-traded firm’s board explained it is currently actively assessing non-binding funding proposals from several parties, including a possible subscription for further amounts of the company's 7% secured convertible bonds and a proposal to subscribe for new ordinary shares of $0.001 each in the company.

Funding strategies under consideration may include a pre-emptive issue open to all shareholders, it added.

“The board will provide further updates as soon as possible,” it said in a statement.

“Whilst the board is confident that funding will be secured, there can be no guarantee that any further funding will be provided or as to the ultimate terms on which funds will be made available.”

United Cacao further noted that any injection of funds, whether by way of a further subscription for the secured bonds or for new ordinary shares, would likely be at a discount to the par value of the secured bonds and current share price of the ordinary shares, the level of which was yet to be determined.

“In the short term, the necessary funds to the paying agent to make the approximate six-monthly $0.21m coupon payment on the secured bonds, which falls due on 31 December, are being transferred.

“Following this payment, the company is taking to steps to manage its near term liquidity requirements, which may involve temporarily reducing operational activities at the company's plantation in Peru and entering into a sale and leaseback transaction on certain of its heavy equipment located on-site in Peru.”

The board said it is confident that, in the absence of a longer term funding proposal being agreed, and assuming ongoing management of short term payables, the steps outlined would provide it with enough working capital until at least February.