Monday, September 24, 2012
Monday, September 24, 2012
TXO ACQUIRES ADDITIONAL 6.54% SHAREHOLDING IN THE GRAND BAHAMA GROUP AND RECEIVES REPAYMENT OF SHORT TERM LOANS
The board of TXO Plc (“TXO”) is pleased to announce that it has completed a further investment in Grand Bahama Group Limited (“GBG”). The Company has purchased further ordinary shares for a consideration of £350,000. This represents a further 6.54% shareholding in GBG and takes TXO’s equity holding in GBG to 23.64%. The Company has also renegotiated the terms of an option to invest a further £2,615,000 in GBG in return for additional ordinary shares in GBG. The Option expires 31st December 2012 (the “Option”). If the Option is exercised, it would increase TXO’s total holding in GBG to 43.18%.
The £350,000 investment by TXO will be directed by GBG to its wholly-owned subsidiary Morgan Oil Marine (Bahamas) Limited, to acquire the leasehold interest in the 3.85 acre site within Freeport Grand Bahama, finalise and submit the final stage of its environmental impact assessment study to the Grand Bahama Port Authority and commence construction of its Hydrocarbon Recovery Plant (“HRP”). The planned HRP would be capable of processing an initial 50 gallons of used oil every minute.
The investment is significant in that TXO’s investment in GBG will exceed 20% and following this additional acquisition the investment is thereafter accounted for using the equity method. Initial recognition is at cost, but thereafter at each reporting period the investment value is adjusted to recognise TXO’s share of the profit or loss and assets for that period, and tested for impairment if necessary.
For the period from 1 January to 12 September 2012 GBG recorded a loss of $433,850 on turnover of $291,643 and had net assets of $337,662 at the period end.
TXO also announces that it has received full repayment of the recent unsecured £49,000 and £10,000 loans it made to the Grand Bahama Group Limited (“GBG”).
“We are pleased to be able to announce we have increased our equity stake in GBG to 23.56% and extended an option that will allow us to increase our stake to 43.18% in the future. The Board remains convinced about the long-term viability of the planned hydrocarbon recovery plant in Freeport, both from an environmental and financial point of view. Our support for this business is all the more positive following our visits to the site and having met with a number of potential suppliers, customers and other interested stakeholders.
GBG remains an important and strategic investment for TXO as a substantial business in its own right. Subject to the funding, the planned Hydrocarbon Recovery Plant will be complete and operational by the start of the New Year. The business plan for this project demonstrates a very high return on capital and we remain committed to supporting this project.”
For further information, please contact:
Tim Baldwin, Chairman +44 (0) 20 7518 4300
Fox-Davies Capital Limited
Richard Hail +44 (0) 20 3463 5027
Simon Leathers +00 (0) 20 3463 5022