COCOA (U) LIMITED

PROPOSED ARRANGEMENT FOR MANAGEMENT OF

STAKEHOLDERS’ DIVERSE INTERESTS

1. Conversion of a portion of debt into equity;

Debt-to-equity swaps enable a borrower to transform loans into shares of stock or

equity. Under this arrangement, creditors like inancial institution/ bank may hold the
new shares after the original debt is transformed into equity shares. In essence, the
lender converts a loan amount or a loan amount represented by outstanding bonds into
equity shares when its converting debt to equity.

2. The company can also enter into a deed of accession transaction

A deed of accession is a document by which a person/ entity becomes a party to an

existing shareholder’s agreement. It is used when an entity becomes a shareholder of a
company by subscribing to new shares or by acquiring existing shares where a
shareholder’s agreement is already in place. It is worth noting that by executing a deed
of accession, the new shareholder becomes a party to the existing shareholder’s
agreement and is bound by all the terms of that agreement.

3. Raising capital through making a call on shares

This is a likely option available to Thomas and Sarah with Stanbic and Absa since the 2
banks have indicated their willingness to the extension that Thomas and Sarah seek if
they increased the Company’s share capital as Stanbic bank has already indicated that
as long as at least 5% of the new capital is paid up and maintained in an account at all
times, then they will be willing to accept Thomas and Sarah’s offer.

4. Renegotiating contracts with creditors to remedy default and breach of

contract

5. Debt rescheduling

priority of payment of creditors debts and appoint a receiver, where

applicable.

iii. practical and necessary steps to protect proposals from threat of enforcement
(iii) What do you think are practical and necessary steps to protect your proposals from
the eminent threat of enforcement by Equity and Post Bank?
The practical step will be to apply for an interim protection order under reg. 135 of the
Insolvency Regulations. This will be done after the company has by special

resolution under section 139 of the Insolvency Act settled with the creditors to appoint
a provisional administrator.

Therefore, we will run to appoint a provisional administrator then apply for interim
protective order after 14 days from which the resolution is to petition court is made.