Further loan facility

Kropz Plc (AIM: KRPZ), an emerging African phosphate producer and developer, announces Kropz Elandsfontein (Pty) Ltd ("Elandsfontein") and ARC Fund ("ARC") have agreed to a ZAR 170 million (approximately US$ 9 million) loan facility (the "Loan").

Refinancing update

The Company continues discussions with potential lenders regarding a replacement loan for the BNP loan facility (outstanding amount US$ 11.25 million). This is currently expected be completed by second quarter of 2024. The Company previously announced on 21 December 2023 that BNP had extended its waiver period to 31 March 2024. The Company has commenced discussions with BNP to further extend the waiver period and will provide updates in due course.

The Loan

The Loan is unsecured. Interest is payable on the Loan at the South African prime overdraft interest rate plus 6%, nominal per annum and compounded monthly. In the event that any amounts outstanding under the Loan, together with interest thereon, is not repaid within 6 months from the first utilisation date, the interest rate will be increased by an additional 2%.

The Loan is repayable on the earlier of a fund raising by the Company (by way of loan or shares) or on demand from ARC, on no less than two business days' notice. There is no fixed term.

The Loan will be used by Elandsfontein to fund the cashflow and operational expenditure needs.

Related Party Transaction

The Loan is a related party transaction pursuant to Rule 13 of the AIM Rules for Companies. Gerrit Duminy, a director of the Company, is the representative of ARC. Mike Nunn, a director of the Company, is the beneficial owner of Kropz International SARL ("Kropz International"). ARC and Kropz International are treated as acting in concert for the purposes of the City Code on Takeovers and Mergers. Accordingly, neither has been involved in the approval of the Loan by the Company's board. The directors of the Company, who are considered independent for the purposes of the Loan, having consulted with the Company's nominated adviser, consider the terms of the Loan to be fair and reasonable insofar as the Company's shareholders are concerned.