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United Cacao may go tits up in February - awful statement: sell

By Tom Winnifrith, The Sheriff of AIM | Thursday 22 December 2016


Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.


We picked up some of these shares at the Dragon's Den pitch at the UK Investor Show. We sold this morning at a loss and in disgust at 91p. The order was just to sell after United Cacao (CHOC) served up the most god-awful trading statement on a day when most folks are just not around but are off doing Christmas shite. Sadly for Cacao Scrooge's biggest fan is at his desk and my comments on this horror are in bold.

Funding Update

Should that not be lack of funding update?

United Cacao Limited SEZC (AIM: CHOC), the AIM-quoted cacao plantation company based in Peru, provides the following funding update. The Board has, for some time, 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. In this regard, the Board is currently actively assessing non-binding funding proposals from several parties, including a possible subscription for further amounts of the Company's 7.00 per cent. secured convertible bonds ("Secured Bonds") and a proposal to subscribe for new ordinary shares of US$0.001 each in the Company ("Ordinary Shares"). Funding strategies under consideration may include a pre-emptive issue open to all shareholders.

In other words its broker Beaufort has been trying to get a placing away but folks were not biting so...

The Board will provide further updates as soon as possible. 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.

Oh, in other words we might get screwed badly or we might go tits up. Take your pick.

The Board further notes 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 is yet to be determined.

If it is a share issue Beaufort will be going to bucket shops and given that we are fucked without the cash this means that the discount will be eye watering so lube up chaps. And that is the best case scenario!

In the short term, the necessary funds to the paying agent to make the approximate six-monthly US$213,000 coupon payment on the Secured Bonds, which falls due on 31 December 2016, are being transferred.

We have sold the office cat and as a result can just about pay the bill after the board did a few shifts at MacDonalds to get those last few cents in.

Following this payment, the Company is taking to steps to manage its near term liquidity requirements, which may involve temporarily reducing operational activities and entering into a sale and leaseback transaction on certain of its heavy equipment located on-site in Peru. The Board 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 above would provide the Company with enough working capital until at least February 2017.

Okay so in January we will sell the family silver, our only assets of note ( the equipment) and stop doing anything on the ground and even then we will be going tits up in early February at the same time as that other Beaufort Client, the fraudsters at Strat Aero (AERO). Maybe we can get a buy one get one free deal with an administrator?


It looks utterly bleak. One broker reckons that Beaufort will be lucky to get a placing away at 20p. Sell.



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