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Port operator in Mombasa drops London listing bid

Comarco Group, the operator of a private port in Mombasa, has abandoned plans to list on the London Stock Exchange (LSE) through a reverse takeover of UK’s publicly-traded company Anglo African Agriculture.

The port and marine logistics firm took a $1 million (Sh113.5 million) secured loan from AAA on November 12, 2018 for general working capital.

Seven months later, the parties signed an agreement to merge and simultaneously raise capital of up to $21 million as a bigger and listed entity.

They failed to raise the funds, through sale of shares to investors, by the first deadline of December 31, 2019 and they recently terminated their proposed tie-up.

This was after some shareholders of Comarco said they did not want to proceed with the transaction.

AAA, which is a smaller business compared to Comarco, says the collapsed deal has left it with considerable liabilities and threatens to sue its former business partner to recover some of the costs.

Comarco has repaid the loan that was provided by AAA, amounting to $1.5 million (Sh170 million) including accrued interest as part of their separation.

“The company is pleased to have received repayment of the loan, although it is considering taking legal action against the vendors of the Comarco Group to recover certain costs and expenses incurred by AAA,” the London-based firm said in a trading update.

“As a consequence of the failed Comarco transaction, the company incurred considerable liabilities, principally as a result of fees incurred with professional advisers.”

The UK firm was betting on the merger to form a bigger business, with its collapse throwing it into a financial crisis.

AAA is now restructuring its debt, including obligations to lenders and providers of professional services relating to the failed transaction.

“The board is pleased to announce that it has reached a settlement with all of the creditors who provided services in connection with the failed Comarco transaction,” AAA said.

“This settlement has reduced our creditor position by about 50 percent and has left the group with a cash position of approximately £550,000 (Sh84.3 million).”

The talks between AAA and Comarco had revealed that the Mombasa port operator also owed substantial sums to Kenyan banks. Comarco had planned to restructure Sh3 billion of the facilities.

The marine logistics firm has a 16-acre facility in Mombasa that falls under the export processing zone (EPZ), allowing it to import equipment such as cranes and loaders duty-free besides receiving tax relief for repairs and maintenance of its vessels.
Source: Business Daily

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