12 Jul 2013 07:00
12 July 2013
AfriAg plc
("AfriAg" or the "Company")
Investment in southern African agricultural and logistics business
AfriAg (AIM: AFRI), the AIM-listed agricultural value chain investing company, is pleased to announce it has signed a binding term sheet to acquire a 40% shareholding in South African company AfriAg (Pty) Ltd ("AfriAg SA"), as the first investment under its policy to invest into the growing African agriculture and logistics sector.
AfriAg SA is currently wholly owned by agri-logistics specialist Mr Paul de Robillard. Paul founded African agri-logistics group Rollex (Pty) Ltd ("Rollex") in 1989 which was subsequently sold to Lonrho Plc in 2008. Mr Paul de Robillard managed Rollex until the end of 2011, by which time it had become a significant proportion of that holding company's business.
The consideration will be £1.326 million and is to be satisfied by way of an initial non-refundable cash consideration of £10,000 payable immediately on signature of the term sheet and the issue of 188,000,000 new ordinary shares of 0.1 pence each in AfriAg (the "Consideration Shares") to Mr Paul de Robillard making him a significant shareholder of the Company.
AfriAg SA was formed to create a specialist management company to harness the market leading know-how and experience of its directors, shareholders and management in the agricultural sector generally in sub Saharan Africa with a particular focus on:
·; Agri-logistics in southern Africa - moving agricultural produce by road, air and sea freight within, to and from South Africa and its neighbouring countries;
·; Processing of agricultural produce including the preparation, packaging and labelling of the produce for end customers including all aspects of post-harvest primary processing with a focus on preparation of produce for the global market;
·; Establishing, managing and co-ordinating structured farmer groups for the collective production of agricultural produce for sector specific crops including but not limited to: lucerne; stone fruit, flowers and general horticultural produce;
·; Sourcing, co-ordinating and managing, in accordance with all international conventions and wildlife regulations, the procurement of and distribution of high value luxury animal products for the global market including: crocodile skins, ostrich meat, exotic animal skins; and
·; Identifying, co-ordinating and implementing market access for agricultural produce.
On completion of the transaction, David Lenigas will be appointed as Chairman of AfriAg SA with AfriAg holding one of the three board seats on AfriAg SA. The management and control of AfriAg SA will remain with Paul de Robillard as that company's majority shareholder. As such AfriAg and AfriAg SA intend to enter into a shareholder agreement to regulate this relationship between the parties.
Completion of the transaction is subject only to signing by both parties of a sale and purchase agreement ("SPA") and shareholder agreement. The Consideration Shares will be issued on completion of the SPA and shareholder agreement, which are both scheduled to be completed within 30 days. Application will be made thereafter for the Consideration Shares to be admitted to trading on AIM ("Admission") and the Consideration Shares will represent approximately 18.6% of the enlarged issued share capital of AfriAg upon Admission.
AfriAg SA has not generated any revenue since incorporation (in the name of Lipsoscan (Pty) Ltd) in January 2012. For the 4 months to 30 June 2013 AfriAg SA generated a net loss of ZAR 277,000 (equivalent to c. £18,500) on no revenue. As at 30 June 2013 the gross assets of AfriAg SA were ZAR 62,000 (equivalent to c. £5,000) comprising cash only.
David Lenigas, Executive Chairman of AfriAg, commented:
"I am delighted to be working again with some of my established colleagues in Africa. Mr Paul de Robillard brings a wealth of agri-logistics experience to AfriAg and has a strong track record of building successful businesses in this sector. AfriAg SA is an exciting and very positive development for our Company as we begin to establish a new agri-logistics brand designed to service the rapidly growing agricultural markets in southern Africa, taking quality African produce to the global marketplace.
"AfriAg SA expects to have its first branded refrigerated trucks in service within the month, taking perishable produce from as far north as Zambia to South Africa, having secured excellent trucking and bulk airfreight rates from South Africa into Europe. We are confident that important customer contracts will start to be won by AfriAg SA in the near future."
"To achieve success in this business, it is crucial to have developed and maintain close personal relationships with food producers and global customers. This Paul and I have in abundance in Africa, which houses 60% of the world's uncultivated arable land.
"AfriAg's vision for the future is to build a series of partnerships and alliances with specialist companies operating in agri-logistics throughout Africa to create the first truly pan-African agri-logistics conglomerate with offices and representative offices across Africa. We are confident that AfriAg SA is the first of many partnerships we will create throughout the continent. The aim is to provide each customer with a bespoke 'field-to-fork' service at the right value, at the right time and at the right quality.
Further announcements regarding the SPA and the shareholder agreement will be made in due course as appropriate.
For further information please contact:
AfriAg plc: +44 (0) 20 7440 0640
David Lenigas
Donald Strang
Nominated Adviser and Broker:
Allenby Capital Limited +44 (0) 20 3328 5656
Nick Naylor
Nick Athanas
Public Relations:
Square1 Consulting +44 (0) 20 7929 5599
David Bick