World Cocoa Foundation

Completion of Convertible Bond Issue and Equity Placing

United Cacao Limited SEZC (AIM: CHOC), the AIM-quoted cacao plantation company based in Peru, is pleased to announce that the Company has secured commitments to subscribe for $6,080,000 of the  7.00 per cent secured convertible bonds, with a maturity date of 30 June 2019 (the "Bonds") (the "Bond Issue"). The Bonds will be admitted shortly to trading on the ISDX Growth Market.

The Company also announces that it has completed an equity placing in Peru to new institutional and family office investors to raise $1,280,000 before expenses (the "Equity Placing"). Mr. Dennis Melka, the Company's Chairman and Chief Executive Officer, has also participated in the Equity Placing.

The net proceeds of the Bond Issue, in conjunction with the Company's existing cash resources (including that cash received from the Equity Placing), will be used to finance additional planting of the Company's owned plantation estate, to part fund the roll-out of the PAPEC programme and for general working capital purposes.

The Bond Issue

Overview

The Company is proposing to raise up to $10,000,000 (approximately £6,530,000) gross through the issue of up to 10,000,000 million secured convertible bonds of denomination $1.00, with a maturity date of 30 June 2019. The Bonds bear interest at the rate of 7.00 per cent per annum, payable semi-annually in arrears.

As at the date of this announcement, the Company has secured commitments for $6,080,000 of the total $10,000,000 fundraising from new and existing investors ("Tranche One"), including commitments from the Company's Executive Chairman and CEO, Dennis Nicholas Melka, to subscribe for $1,075,000 and from Non-Executive Director, Constantine Gonticas, to subscribe for $200,000.

The Company and Mr. Melka have also entered into a call option arrangement pursuant to which the Directors (other than Mr. Melka) (the "Independent Directors") may call upon Mr. Melka to subscribe for up to a further $2,000,000 of the Bonds (the "Call Option") ("Tranche Two").

At maturity, Bondholders may choose to either convert the outstanding principal of the Bonds into Ordinary Shares at a conversion price of US$3.40 per share (approximately 222p) or to redeem in cash. At maturity, the maximum amount of Ordinary Shares that may be issued under Tranche One, assuming full conversion to equity, is 1,788,235.

The Bond Issue is conditional on, inter alia, admission to trading of the Bonds on the ISDX Growth Market having occurred by 30 November 2015 for Tranche One and 14 July 2016 for Tranche Two, should the Call Option be exercised by the Independent Directors.

Further Information on the Bond Issue

An information memorandum has been prepared in connection with the admission of the Bonds to the ISDX Growth Market (the "IM"). The IM sets out in detail, inter alia, the terms and conditions of the Bond Issue. Copies of the IM will be available free of charge during usual business hours on any weekday (public holidays excepted) at the offices of Strand Hanson Limited at 26 Mount Row, London W1K 3SQ and on the Company's website: www.unitedcacao.com  

The IM references the AIM Admission Document prepared in connection with the Company's admission to trading on AIM in December 2014 which is also available on the Company's website.

Pursuant to Appendix 2 of the ISDX Rules, the Company is also required to release an admission application announcement via a Regulatory Information Service. This announcement is also released on the ISDX website. The contents of this announcement are set out at the end of this announcement for reference. 

For the avoidance of doubt, the Ordinary Shares, which currently trade and will continue to trade on AIM, will not also be admitted to trading on the ISDX Growth Market. The Bonds and the Ordinary Shares are both eligible for CREST settlement.

The Equity Placing

Overview

The Company has successfully completed an equity placing with new investors in Peru to raise $1,280,000 million before expenses through the placing of 474,074 new ordinary shares of US$0.001 each (the "Ordinary Shares") at a placing price of US$2.70 (approximately 176 pence) per Ordinary Share (the "Placing Price") (the "Placing Shares").

The Placing Price represents a discount of approximately 7.4 per cent. to the closing middle market price of 190 pence per Ordinary Share on 26 October 2015, being the last business day prior to the announcement of the Equity Placing and a 35 per cent premia to the Company's price per share at Admission on 2 December 2014.

The Placing Shares will be fully paid and will rank pari passu in all respects with the existing Ordinary Shares.

Dennis Melka has subscribed for 4,074 Ordinary Shares in the Equity Placing. Following the Equity Placing, Mr Melka is directly and indirectly interested in 5,234,821 Ordinary Shares representing 27.46 per cent. of the Company's currently issued share capital.

Related Party Transaction

The subscriptions by Mr. Melka and Mr. Gonticas as part of Tranche One, the entering into the Call Option with Mr. Melka and Mr. Melka's participation in the Equity Placing are considered related party transactions under the AIM Rules.  The Independent Directors consider, having consulted with Strand Hanson Limited, the Company's nominated adviser, that the terms of the transaction are fair and reasonable insofar as the Company's shareholders are concerned.

Admission to Trading and Total Voting Rights

Application has been made to the London Stock Exchange for admission of the Placing Shares to trading on AIM ("Admission") and it is expected that Admission will take place and that trading will commence on AIM on or around 2 November 2015. Following Admission and the above-mentioned option exercise, the Company will have 19,064,074 Ordinary Shares in issue with each share carrying the right to one vote.

The Company has no Ordinary Shares held in treasury. The total number of voting rights in the Company following Admission will therefore be 19,064,074. This figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FCA's Disclosure and Transparency Rules.

Dennis Melka, Executive Chairman & CEO, commented:

 "We are delighted at the success of the capital raising which allows the Company to continue its aggressive planting programme and roll-out of its small farmer initiative. The Company seeks to be the world's largest and lowest cost producer of cacao when the planting of its owned estates is completed in 2017. Whilst global chocolate confectionary sales continue to increase, the cacao market remains in tight supply and based on recent news reports, all three main producing countries, Cote d'Ivoire, Ghana and Indonesia, are in a state of supply contraction."

Ricardo Carrion, Managing Director of Kallpa Securities SAB, commented:

"The local market equity placing managed by Kallpa is a milestone event for United Cacao in that it includes the Company's first Latin American institutional investors. This is an important step in improving CHOC's liquidity on the Lima stock exchange and bringing more local investors into the registry. Peru has a clear global cost and productivity advantage in the production of cacao and excellent low-cost export logistics to move the dried, fermented beans to confectionary buyers in Asia, North America or Europe. United Cacao is well-positioned to benefit from the dual trends of continually rising global chocolate sales and diminishing bean supply from West Africa and Asia."

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