Source: Ariston to seek investor approval of $4m into equity | The Herald July 20, 2016
AGRO-CONCERN Ariston Holdings will next month seek shareholder approval to convert $4 million debt owed to its majority shareholder — Origin Global Holdings into equity in a move expected to strengthen its balance sheet and enhance profitability. Converting debt to equity will free up Ariston’s balance sheet which will enable the company to raise further cheaper and long-term capital needed for its business operations and its successful growth prospects.The debt to equity conversion will increase Origin Global’s shareholding in the company to 72,13 percent from 67,64 percent.
Second largest shareholder, the National Social Security Authority (NSSA) will subsequently have its shareholding reduced to 8,76 percent from 10,17 percent prior conversion.
The transaction will be done at a conversion ratio of 55,55 shares for every $1 of debt owed. This translates to 222,2 million Ariston shares at a price of 1,8 cents a share.
“It is envisaged that such a move should result in meaningful savings to the company by reducing its interest bill,” said Ariston in a circular to shareholders.
As at September 30, 2015, the total interest owing to Origin Global was $1,5 million, which has been waived, a move that will enhance Ariston’s continuing operational viability.
The shareholder debt to equity conversion will also result in a full and final settlement of the shareholder loans, outstanding as at September 30, 2015 which Ariston was failing to service.
“This will free the company’s cash flows and reduce interest burden for Ariston an in turn, enhance profitability of the company,” said Ariston.
After conversion, the debt to equity ratio of the company is expected to improve to 52 percent from 110 percent as at September 30 2015, inclusive of shareholders’ loans of $5,5 million.
In the six months to March 2016, Ariston reported 32 percent fall in revenue to $3,8 million on bad weather while loss from continuing operations amounted to $2 million compared to prior year’s profit of $0,1 million.
Ariston operates three divisions, Southdowns, Claremont and Kent estates involved in macadamia nuts, tea production, stone fruits, passion fruits, horticultural crops and poultry activities.