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Danakali's new substantial shareholder AFC has 16.63% stake in potash developer

Africa Finance Corporation has completed the first US$21.5 million tranche of a US$50 million placement.

Danakali Ltd - Danakali's new substantial shareholder AFC has 16.63% stake in potash developer
The company is in the pre-development stages of the Collulli SOP Project

Danakali Ltd (ASX:DNK) (LON:DNK) has a new substantial shareholder in Africa Finance Corporation (AFC) which has a 16.63% stake after completing the first tranche of a strategic equity investment.

The tranche of almost 53 million shares at 60 cents per share was completed on December 10, 2019, and valued in excess of US$21.5 million (~A$31.8 million).

AFC’s investment is part of the overall funding package for development and construction of Danakali’s Colluli Sulphate of Potash (SOP) Project in Eritrea.

Tranche 2 upcoming

Tranche 2 will consist of about 70 million shares at the same issue price as the first tranche to raise another US$28.5 million (~A$42 million).

This is subject to Danakali shareholder approval at a general meeting expected to be held in February 2020, execution of senior debt documentation and other conditions precedent.

Total US$150 million participation

The placement takes AFC’s total participation to US$150 million which demonstrates their major and long-term commitment to the project, Danakali and Eritrea.

This comprises US$50 million in Danakali equity plus US$100 million of credit approved Colluli Mining Share Company (CMSC) senior debt.

“Momentum towards financial close”

Danakali’s chief executive officer Niels Wage said recently: “I am very pleased to have secured AFC as a strategic equity investment partner.

“It marks a significant milestone for Danakali and continues our momentum towards financial close.

“Danakali has made good progress over the past 12 months having secured a large proportion of the development capex for Module I and demonstrated a sustainable approach to the future development of Colluli.”

Quick facts: Danakali Ltd

Price: 0.58 AUD

ASX:DNK
Market: ASX
Market Cap: $184.76 m
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Danakali CEO discusses US$50mln investment by Africa Finance Corporation

Danakali Ltd (ASX:DNK) (LON:DNK) CEO Niels Wage speaks to Proactive London's Andrew Scott following the news Africa Finance Corporation (AFC) has agreed to a US$50 million strategic equity investment. The subscription agreement with AFC will facilitate the start of project execution...

on 12/12/19

2 min read