Regulatory Story
Go to market news section View chart   Print
Company African Medical Investments PLC
TIDM AMEI
Headline

Interim Results

Released 07:00 30-Nov-2012
Number 3494S07

RNS Number : 3494S
African Medical Investments PLC
30 November 2012
 



African Medical Investments plc / Index: AIM / Epic: AMEI / Sector: Healthcare

30 November 2012

African Medical Investments plc ('African Medical' or 'the Company')

Interim Results

 

African Medical Investments plc, the AIM listed company operating in the African healthcare sector, announces its results for the six month period ended 31 August 2012.

 

OVERVIEW:

 

·    Improved medical case mix in hospitals lays foundation for sustainable revenue improvements

·    Cost control initiatives bear fruit with 16% reduction in Group operating expenses

·    Operating loss down 19%, with losses per share from continuing operations down 26%

·    Defined growth strategy - Tete, Mozambique facility opened and to be developed into fully fledged hospital over the next two years

·    Balance sheet restructure continued through disposal of Air Evacuation subsidiary and other non-core assets

·    Maputo hospital access disrupted by major roadworks, negatively impacting turnover; however construction will enhance long term access

·    Harare facility remains the subject of legal dispute negatively impacting results for the period through loss of revenue and increased legal costs

 

CHIEF EXECUTIVE OFFICER'S STATEMENT

 

Our strategy review and growth objectives remain centred on the stabilisation of our current portfolio of medical facilities, being the AMI Hospital Maputo, AMI Hospital Dar es Salaam and AMI Hospital Harare, as we focus on creating a foundation for sustainable profitability moving forward.  Nonetheless, we have also made important strides forward with our expansion plans, and have now opened a clinic in Tete, Mozambique, and remain in advanced negotiations to secure a hospital management contract in Lusaka, Zambia.  With a defined development and growth strategy continuing to fuel the Group's turnaround, African Medical is continuing to build on its offering of excellent international standard healthcare to create a leading specialist hospital brand in Africa.

 

This opportunity to create a leading specialist hospital brand remains a hugely attractive prospect for the Group, as the economic fundamentals of Africa continue to underpin the demand and requirement for a quality private healthcare provider. With a rapidly growing, and increasingly urban population there is an ever expanding captive market for international quality healthcare.  This mainly stems from the burgeoning African middle class, foreign business investors, governments and health insurers, looking to secure high quality and affordable medical support.  With this in mind, we have looked to further tailor our healthcare offerings to meet these requirements and identified potential new opportunities to expand and attract new patients and corporate clients.

 

Our primary focus throughout the period has been on the continued recovery of our existing operations, concentrating particularly on revenue, cost control, governance and reporting.  On a broader Group level, we have also started the necessary process of restructuring and strengthening our balance sheet and I would like to thank shareholders for their recent approval, which has given the directors the ability to issue further ordinary shares to convert the existing convertible loan notes owned by our long term investment partner, Harbinger Capital Partners Master Fund I, Ltd ('Harbinger'), which will enhance our balance sheet further. 

 

Finally, the Group continues to outsource non-core activities and dispose of non-core businesses in order to focus on its primary revenue drivers, its healthcare facilities, which the Board believe have the optimum potential to deliver returns for shareholders. 

 

Key objectives at each of the Group's hospital facilities have included attracting specialist doctors and consultants to the facilities to drive supplier-induced demand, forging and improving relationships with insurers and corporates to secure preferred provider contracting status, and improving the accessibility and affordability of our primary care and casualty facilities.  These three points remain the key ingredients to creating the optimum case mix for a hospital with the objective of establishing a consistent and reliable revenue stream.  In addition, cost control remains high on the agenda resulting in an overall reduction in continuing operating expenses in each of the hospitals.  The overall reduction in overhead expenses of 16% is, however, attributable to the inactivity at the Harare hospital.  Group central operating expenses have risen 13% following the appointment of the new management in the second half of 2012. 

 

AMI Hospital Dar es Salaam

 

The above described process of improving the case mix has produced solid results at the 30 bed AMI Hospital Dar es Salaam, with revenues increasing 18% to US$1.3m (2011: US$1.1m).  Revenues have benefited from price reductions driving a 28% increase in patient numbers from approximately 1,000 per month to more than 1,300 per month during the period.  We are confident of maintaining these trends and remain proactive in negotiating contracts with new insurers and corporates to ensure we remain a preferred provider in Tanzania.  In conjunction with the upswing in insurance demand, the number of patients drawn to the hospital due to specialist doctors has also increased following the appointment of key clinical staff in the strategically important disciplines of gynaecology, paediatrics, orthopaedics, and urology.  In line with this, I am confident that as word continues to spread regarding clinical specialities, further supplier led business will be generated henceforth.

 

Cost of sales in this AMI Hospital Dar es Salaam has declined by 27%, resulting in a reduction in gross loss from $1m to $0.3m.

 

The restructuring of hospital operations at the AMI Hospital Dar es Salaam has also enabled us to refocus our most value accretive and efficient clinical activities, which include minor and routine surgical procedures.  To capitalise on these high margin procedures, we have tailored our theatres and case mix to optimise efficiencies and theatre usage.  Improving facilities, such as our day theatre, is an important step for the Group, and in the same vein, the disposal of non-core facilities and services is a necessary tool in reducing operating expenditure and improving efficiencies.  With this in mind, the decision to dispose of our aesthetics business at the Dar es Salaam hospital was taken in order for us to concentrate fully on our core specialities including women's, children's and specialist surgery.

 

AMI Hospital Maputo

 

A key challenge at our 35 bed AMI Hospital Maputo has been the reduction of debtors and improving our cost of sales, and we are making headway in both regards.  Key initiatives have included the tightening of controls over credit and insurance sales since February 2012 and this has borne fruit for the hospital during the reporting period.  Having established this facility as a centre of excellence for disciplines such as paediatrics, gynaecology, surgery, orthopaedics, and dentistry, we have worked hard to establish the right case mix to improve revenues. However revenues have been negatively impacted during the period, with turnover down 28% to US$2.3m (2011: US$3.2m) due to outsourcing of the pathology lab, sale of the aesthetics unit, pricing contracts with insurers and disruptions to access owing to road infrastructure upgrades in front of the hospital from July 2012. The combined effect of these factors has been a reduction in patient numbers from approximately 3,400 per month to 2,300 per month.  Despite the short term impacts of the road works, we are confident that the upgrade will have a positive long term affect on our revenue generation potential as our hospital will be located on a major dual carriage thoroughfare of Maputo.  This will both increase traffic passing the facility providing emergency patients with easier access, and provide the hospital with further visibility and exposure for patients requiring specialist care or non-emergency clinical assistance.  Importantly during this period, in-patient numbers, an important driver of profitability, remained stable.

 

Cost of sales in the AMI Hospital Maputo declined 15% resulting in a gross profit of $0.2m compared with $0.7m in the previous period. This reduction in gross profit was due to both the reduced patient numbers and revenues described above, but also certain semi-variable costs, particularly employment costs that continued to be incurred.

 

AMI Hospital Harare

 

The Group's third hospital facility, the 18 bed AMI Hospital Harare, has been the subject of a legal dispute following the forcible occupation of the hospital by the former management company led by the previous chief executive.  Proceedings in the Supreme Court are on-going and the arguments in the case have now been heard.  We await a judgement regarding the eviction order which we anticipate to receive by the end of 2012.  As would be expected, the continuing legal issues and loss of revenue at Harare has affected the Group's overall financial performance, with Harare revenue during the period down to US$ nil (2011: US$0.9m).

 

Tete and Lusaka developments

 

The third dimension to our development strategy, following the stabilisation and growth of our current facilities, concerns the expansion into new geographic locations.  This strategy began during the period with the opening of a small clinic in Tete in northern Mozambique.  Whilst this remains a small facility compared with our other healthcare units, our objective is to establish a fully-fledged specialist hospital at the site over the next two years.  The clinic is now generating modest revenues and with a rapidly expanding mining hub with limited healthcare services currently within easy access, we believe this represents a good opportunity to build a significant business in Tete.  In addition, management is in advanced negotiations to secure a hospital management contract in Lusaka, Zambia.

 

Corporate strategy and financing

 

In terms of corporate strategy, we have focussed on putting the foundations in place to recapitalise the Group and rationalise our structure, which has included the commencement of initiatives to dispose of unnecessary offshore subsidiaries.  We have supplemented our interim cash requirements during the period through the issue of convertible loan notes to Harbinger, as has been announced previously, and also through the disposal of our aviation business.  Whilst this has enabled the Group to continue to implement its turnaround strategy, our immediate objective is to secure the Group's funding requirements through appropriate long-term gearing of the restructured balance sheet as well as attracting new strategic and/or financial investors as we continue to believe the Group has the potential to create substantial value for shareholders. 

 

I look forward to providing further updates regarding our funding strategy in due course, and would like to extend my thanks to our valued shareholders and partners for their continued commitment as we establish African Medical as a leading medical brand across the continent. 

 

Peter Botha

Chief Executive Officer

30 November 2012

 

** ENDS **

 

For further information please visit www.amiplc.com or contact:

Peter Botha

African Medical Investments Plc

Tel: +44 (0) 20 7408 9200

Jonathan Wright

Seymour Pierce Ltd

Tel: +44 (0) 20 7107 8000

David Foreman

Seymour Pierce Ltd

Tel: +44 (0) 20 7107 8000

Hugo de Salis

St Brides Media & Finance Ltd

Tel: +44 (0) 20 7236 1177

Susie Geliher

St Brides Media & Finance Ltd

Tel: +44 (0) 20 7236 1177

 

 

  

Condensed Consolidated Income Statement

For the six month period to 31 August 2012

 

 

 

Unaudited

Unaudited

Unaudited

 

 

 

 

Note

6 months to

31 August

2012

6 months to

31 August

2011

year ended

29 February

2012

 

 

 

$'000

$'000

$'000

Revenue

3,560

      5,254

10,944

Cost of sales

 (3,735)

(5,102)

    (10,452)

 

Gross (loss) / profit

           (175)

152

492

Operating expenses

(3,054)

(3,635)

(8,641)

Loss from financial irregularities

(24)

(272)

(450)

Loss from sale of property, plant and equipment

-

-

(191)

Impairment reversal of property, plant and equipment 

215

-

-

Impairment of property, plant and equipment 

-

-

(4,302)

Impairment of current loans receivable

-

-

131

Operating loss

(3,038)

(3,755)

(12,961)

Other (losses) and gains

                (1)

1

50

Net finance (expense)  / income

 

(390)

                2

(540)

Loss for the period from continuing operations

(3,429)

(3,752)

(13,451)

 

 

 

 

Discontinued operations

 

 

 

Loss for the period from discontinued operations

4

(405)

(122)

(1,570)

Loss for the period attributable to owners of the company

(3,834)

(3,874)

(15,021)

 

 

 

 

 

 

Loss per share

- Basic and diluted (cents)

 

 

5


(1.19 cents)

 

(1.49 cents)

 

(5.31 cents)

 

 

 

 

 

 

Loss per share from continuing operations

- Basic and diluted (cents)

 

5


(1.06 cents)

 

(1.44 cents)

 

(4.76 cents)

 

Loss per share from discontinued operations

- Basic and diluted (cents)

 

5


(0.13 cents)

 

(0.05 cents)

 

 

(0.56 cents)

 

 

 

 

Condensed Consolidated Statement of Comprehensive Income

For the six month period to 31 August 2012

 

 

 

 

Unaudited

Unaudited

Unaudited

 

 

 

 

6 months to

31 August

2012

6 months to

31 August

2011

year ended

29 February

2012

 

 

 

$'000

$'000

$'000

 

 

 

 

Loss for the period

 

(3,834)

(3,874)

(15,021)

Other comprehensive income net of tax:

 

 

 

Foreign exchange translation (loss) / gain

(37)

             654

207

Total comprehensive income for the period

(3,871)

(3,220)

(14,814)

 

 

 

 

Comprehensive income attributable to owners of the parent

 

(3,871)

 

(3,220)

 

(14,814)


 

Condensed ConsolidatedBalance Sheet

As at 31 August 2012

 

 

 

 

Unaudited

31 August

2012

Unaudited

31 August

2011

Unaudited  

29 February

2012

 

 

Note

$'000

$'000

$'000

Assets

 

 

 

 

 

Non current assets

 

 

 

 

 

Property, plant and equipment

 

13,223

21,369

15,263

Total non-current assets

 

 

13,223

21,369

15,263

 

 

 

 

 

 

Current assets

 

 

 

 

 

Inventories

 

 

938

444

642

Trade receivables

968

1,556

1,009

Other receivables

670

476

293

Cash and cash equivalents

 

 

338

626

195

Total current assets

 

 

2,914

3,102

         2,139

 

 

 

 

 

 

Total assets

 

 

16,137

24,471

17,402

 

 

 

 

 

 

Liabilities

 

 

 

 

 

Current liabilities

 

 

 

 

 

Trade payables

 

 

(1,791)

(996)

(1,309)

Other payables

 

 

(3,813)

(2,499)

(3,732)

Bank overdraft

 

 

(863)

-

(283)

Total assets

 

 

(6,467)

(3,495)

(5,324)

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

Interest bearing loans

 

 

6

(6,294)

(4,750)

(5,271)

Total liabilities

 

 

(12,761)

(8,245)

(10,595)

 

Net assets

 

 

3,376

 

16,226

 

6,807

 

 

 

 

 

 

Equity

 

 

 

 

 

Issued share capital

 

7

57,267

55,267

57,267

Other reserves

 

6

1,444

987

1,004

Share based payment reserve

 

217

  59

217

Warrant reserve

 

647

647

647

Translation reserve

 

 

619

1,103

656

Retained earnings

 

 

(56,818)

(41,837)

(52,984)

 

Total equity

 

 

 

3,376

 

16,226

 

6,807

 

 

 

 

 

 

 

Condensed Consolidated Statement of Changes in Equity

As at 31 August 2012

 

 

Issued share capital

$'000

 

 

Other

reserves

$'000

Share-based payment reserve

$'000

 

 

Warrant reserve

$'000

 

 

Translation reserve

$'000

 

 

Retained earnings

$'000

 

 

Minority interests

$'000

 

 

 

 

 

 

Total

$'000

Balances at 1 March 2011

55,267

987

59

647

449

(37,963)

-

19,446

Loss for the 6 months to 31 August 2011

-

-

-

-

-

(3,874)

-

(3,874)

 

Other comprehensive income

 

 

 

 

 

 

 

 

Exchange translation differences on foreign operations

-

-

-

-

654

-

-

654

Total comprehensive income for the year

-

-

-

-

654

(3,874)

-

(3,220)

 

 

 

 

 

 

 

 

 

Balance at 31 August 2011

55,267

987

59

647

1,103

(41,837)

-

16,226

Loss for 6 months to 29 February 2012

-

-

-

-

-

(11,147)

-

(11,147)

 

Other comprehensive income

 

 

 

 

 

 

 

 

Exchange translation differences on foreign operations

-

-

-

-

(447)

-

-

(447)

Total comprehensive income for the year

-

-

-

-

(447)

(11,147)

-

(11,594)

Transactions with owners

 

 

 

 

 

 

 

 

Convertible loan note issue - equity portion

-

17

-

-

-

-

-

17

Share based payment charge

-

-

158

-

-

-

-

158

Share issues

2,000

-

-

-

-

-

-

2,000

Total transactions with owners

2,000

17

158

-

-

-

-

2,175

 

 

 

 

 

 

 

 

 

Balance at 29 February 2012

57,267

1,004

217

647

656

(52,984)

-

6,807

 

 

 

 

 

 

 

 

 

 

 

 

 

Condensed Consolidated Statement of Changes in Equity (continued)

As at 31 August 2012

 

 

Issued share capital

$'000

 

 

Other

reserves

$'000

Share-based payment reserve

$'000

 

 

Warrant reserve

$'000

 

 

Translation reserve

$'000

 

 

Retained earnings

$'000

 

 

Minority interests

$'000

 

 

 

 

 

 

Total

$'000

Balance at 1 March 2012

57,267

1,004

217

647

656

(52,984)

-

6,807

Loss for the 6 months to 31 August 2012

-

-

-

-

-

(3,834)

-

(3,834)

 

 

 

 

 

 

 

 

 

Other comprehensive income

 

 

 

 

 

 

 

 

Exchange translation differences on foreign operations

-

-

-

-

(37)

-

-

(37)

Total comprehensive income for the year

-

-

-

-

(37)

(3,834)

-

(3,871)

Transactions with owners

 

 

 

 

 

 

 

 

Convertible loan note issue - equity portion

-

440

-

-

-

-

-

440

Total transactions with owners

-

440

-

-

-

-

-

440

 

 

 

 

 

 

 

 

 

Balance at 31 August 2012

57,267

1,444

217

647

619

(56,818)

-

3,376


Condensed Consolidated Statement of Cash Flows

For the six months to 31 August 2011

 

 

 

Unaudited

6 months to

31 August

2012

Unaudited

6 months to

 31 August

2011

Unaudited

Year to

29 February

2012

 

$'000

$'000

$'000

Loss before taxation

(3,429)

(3,752)

(13,451)

Adjustments for:

 

 

 

-  Depreciation of property, plant and equipment

138

975

1,309

-  Share based payments expense

-

-

290

-  Provision for bad debts (decrease) / increase

(13)

-

897

-  Loss on disposal of property, plant and equipment

356

6

191

-  Other gains and losses

65

(2)

(132)

-  Net interest expense / (income)

390

(2)

540

-  Impairment reversal of property, plant and equipment

(215)

-

-

-  Impairment of property, plant and equipment

-

-

4,302

-  Impairment of current loans receivables

-

-

(131)

Operating cash outflow before movements in working capital

(2,708)

(2,775)

(6,185)

Working capital adjustments:

 

 

 

-  Increase in inventories

(144)

(128)

(330)

-  Decrease / (increase) in trade and other receivables

43

(636)

(892)

-  Increase / (decrease) in trade and other payables

 543

(354)

1,094

-  FCTR effect in income statement

-

94

-

Cash used in operations

(2,266)

(3,799)

(6,313)

Interest received

-

2

1

Finance costs

(5)

-

(3)

Net cash used in discontinued operations

(147)

(288)

(322)

Net cash used in operating activities

(2,418)

(4,085)

(6,637)

 

 

 

 

INVESTING ACTIVITIES

 

 

 

Purchase of property, plant and equipment

(188)

(602)

(806)

Proceeds on disposal of property, plant and equipment

114

13

137

Proceeds on disposal of subsidiary

972

-

-

Net cash used in investing in discontinued activities

(3)

(62)

(158)

Net cash used in investing activities

895

(651)

(827)

 

FINANCING ACTIVITIES

 

 

 

Proceeds from issue of share capital

-

-

2,000

Proceeds from issue of convertible loan note

1,075

700

700

Net cash flow from financing activities

1,075

700

2,700

 

 

 

 

Net decrease in cash and cash equivalents

(448)

(4,036)

(4,764)

Cash and cash equivalents at start of the period

(88)

4,681

4,681

Effect of foreign exchange rate changes

11

(19)

(5)

Cash and cash equivalents at end of the period

(525)

626

(88)



Notes to the Interim Consolidated Financial Statements

 

1.

General Information

 

African Medical Investments plc ("the Company") and its subsidiaries (together "the Group") are focused on the African healthcare sector.  The Company is a public limited company incorporated and domiciled in the Isle of Man.  The address of its registered office is Fort Anne, Douglas, Isle of Man, IM1 5PD.

 

The Company is listed on the AIM Market of the London Stock Exchange plc.

 

The unaudited interim consolidated financial statements for the six months ended 31 August 2012 were approved for issue by the board on 30 November 2012.

 

The figures for the six months ended 31 August 2012 and 31 August 2011 are unaudited and do not constitute full accounts. The comparative figures for the year ended 29 February 2012 are extracts from the annual report, subject to adjustment for the reclassification of discontinued operations, and do not constitute statutory accounts.

 

The interim consolidated financial statements have been presented and prepared in US Dollars because this is the currency of the primary economic environment in which the Group operates.

 

2.

Basis of preparation

 

The basis of preparation and accounting policies set out in the Annual Report and Accounts for the year ended 29 February 2012 have been applied in the preparation of these interim condensed consolidated financial statements. These are in accordance with the recognition and measurement criteria of International Financial Reporting Standards ("IFRS") as adopted by the European Union ("EU") and with those of the Standing Interpretations issued by the International Financial Reporting Interpretations Committee ("IFRIC") of the International Accounting Standards Board ("IASB").  References to IFRS hereafter should be construed as references to IFRS as adopted by the EU.

 

3.

Accounting policies

 

The interim condensed consolidated financial statements have been prepared on a consistent basis with the accounting policies that are expected to apply in the full year financial statements for the year ending 28 February 2013, which will be prepared in accordance with IFRS as adopted by the EU. The current and comparative periods have been prepared using the accounting policies and practices consistent with those adopted in the annual financial statements for the year ended 29 February 2012.

 

The financial information set out in this interim report does not constitute statutory accounts.  The financial information for the six month periods ended 31 August 2012 and 2011 is neither audited nor reviewed.  Information relating to the year 29 February 2012 is derived from the statutory accounts for that period, which have been reported on by the Company's auditors.  The auditors' report on those accounts contained an emphasis of matter in regard to going concern, and an emphasis of matter in regard to losses and impairments arising from financial irregularities and other asset impairments.

 

4.

          Discontinued operations

 

On 15 June 2012, the company entered into an agreement to sell its wholly owned subsidiary, AMI Aviation Services (Pty) Ltd ('AMI Aviation'), for US$1.3 million.  The disposal was in accordance with the Board's strategy of consolidating the Company's portfolio of specialist private hospitals and improving its financial performance. 

 

Consequently, the aviation business has been reclassified as a discontinued operation and its trading results are included in the income statement as a single line below 'Loss for the period from continuing operations' and the comparatives restated accordingly. The trading results' arising from the discontinued operations was as follows:

 


Unaudited

Unaudited

Unaudited


31 August

2012

31 August

2011

29 February

2012

 

$'000

$'000

$'000

Revenue

371

687

1,147

Cost of sales

(1)

(3)

(753)

Gross profit

370

684

394

Operating expenses

(582)

(806)

(1,057)

Impairment of property, plant and equipment

-

-

(1,056)

Other gains and losses

(4)

-

149

Loss on disposal of subsidiary

(189)

-

-

Loss for the year

(405)

(122)

(1,570)

 

5.

Loss per share

 

The calculation of basic and diluted loss per share is based on the following data:

 

 

 

 

Unaudited

Unaudited

Unaudited

 

 

 

 

 

6 months to

31 August

2012

6 months to

31 August

2011

Year to

29 February

2012

 

 

 

$'000

$'000

$'000

 

 

 

 

 

 

Loss for the purpose of basic loss per share (loss for the period attributable to equity holders of the parent)



(3,834)

 

 

(3,874)

 

 

(15,021)

 

 

 

 

 

 

 

 

 

 

Loss for the purpose of basic loss per share on continuing operations (loss for the period on continuing operations attributable to equity holders of the parent)




(3,429)

 

 


(3,752)

 

 


(13,451)

 

 

 

 

 

 

 

 

 

 

Loss for the purpose of basic loss per share on discontinued operations (loss for the period on discontinued operations attributable to equity holders of the parent)




(405)

 

 


(122)

 

 


(1,570)

 

 

 

 

 

 

 

 

 

 

Number of shares:

 

 

 

 

 

Weighted average number of ordinary shares for the purposes of basic and diluted loss per share


322,233,871

 

260,526,741

 

282,638,463

 

 

 

 

 

 

Loss per share

 

 

(1.19 cents)

(1.49 cents)

(5.31 cents)

 

 

 

 

 

 

Loss per share from continuing operations

 

 

(1.06 cents)

(1.44 cents)

(4.76 cents)

 

 

 

 

 

 

Loss per share from discontinued operations

 

 

(0.13 cents)

(0.05 cents)

(0.56 cents)

 

 

 

 

 

 

 

Due to the loss incurred in the period, there is no dilutive effect of share options.

 

6.

          Interest bearing loans

 

 

 

Unaudited

6 months to

31 August

2012

 

Unaudited

Year to 29 February

2012

 

 

$'000

 

$'000

Nominal value of convertible loan notes in issue at the beginning of the year

 

 

6,275

 

 

5,036

Convertible loan notes issued during the year

 

1,122

 

700

Interest

 

342

 

538

 

 

7,738

 

6,275

 

 

 

 


Represented by:

 

 

 


Fair value of convertible loan notes

 

6,294

 

5,271

Equity - Other reserves

 

1,444

 

1,004

Total liability

 

7,738

 

6,275

 

 

 

 


 

 

On 2 February 2011 convertible loan notes to the value of $5,000,000 were issued to Harbinger Capital Partners Master Fund Limited ('Harbinger') bearing interest at 10% per annum. An extension of this agreement was finalised on 16 August 2011 with the issue of a further $700,000 convertible loan notes. On 29 August 2012, the terms of the convertible loan notes were amended to provide the Group with the right to convert the loan notes to equity and such that the conversion price for the loan notes was reduced to 0.875p per share or any lower price if shares were subsequently issued at such lower price.

 

During the period, loan notes were issued to Harbinger on 7 March 2012 and 20 April 2012 for $450,000 and $375,000 respectively with compound annual interest rates of 10% and 18% respectively.  On 29 August 2012 the terms of these loan notes were amended to provide Harbinger and the Group the right to convert the loan notes to equity at 0.875p per share or any lower price if shares are subsequently issued at such lower price, and to reduce the interest rate to 10% compounded annually.

 

 

The convertible loan note instruments constitute a compound financial instrument. The fair value of the instruments has been calculated using a discount rate of 15%, being the director's best estimate of a fair rate of interest for an ordinary loan excluding any equity elements.

 

7.

           Share capital

 

 

 

 

 

Ordinary shares of no par value

 

 

 

 

Allotted and fully paid

 

 

 

 

Number

$'000

At 1 March 2011 and 31 August 2011

 

 

 

260,526,741

55,267

Issue of shares (a)

 

 

 

61,707,130

2,000

At 1 March 2012 and 31 August 2012

 

 

 

322,233,871

57,267

 

(a) Upon his appointment as Chief Executive Officer on 5 July 2011, Dr. Peter Botha subscribed for a total of 61,707,130 shares in the company at a price of 2 pence per share. All requirements necessary for the completion of this subscription were met on 28 September 2011.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
IR LLFISLTLAFIF
Close
London Stock Exchange plc is not responsible for and does not check content on this Website. Website users are responsible for checking content. Any news item (including any prospectus) which is addressed solely to the persons and countries specified therein should not be relied upon other than by such persons and/or outside the specified countries. Terms and conditions, including restrictions on use and distribution apply.

Interim Results - RNS