US$28 million received from Marathon Oil

RNS Number : 7440W

Agriterra Ltd

31 January 2013

 



Agriterra Ltd / Ticker: AGTA / Index: AIM / Sector: Agriculture

31 January 2013

Agriterra Ltd ('Agriterra' or 'the Group')

US$28 million received from Marathon Oil 

Agriterra Ltd, the AIM listed pan African agricultural company, is pleased to announce that it has completed the assignment of its 20% interest in the South Omo Block ('the Block') to Marathon Ethiopia Limited BV, a wholly-owned subsidiary of Marathon Oil Corporation (NYSE: MRO) ('Marathon Oil') and has received a payment of US$28million (plus closing adjustments), from Marathon Oil. 

In addition a gross sum of US$12 million has been lodged with the Government of Ethiopia, on account, pending finalisation of any tax payable by Agriterra related to this transaction.  Tax will be calculated at 30% of the net gain realised after attributable past costs incurred by Agriterra in the development of the Block.  After final determination of any tax payable, the balance will be refunded to Agriterra.

A further US$10 million (subject to applicable tax) will be payable to Agriterra on Marathon Oil's participation in a commercial discovery in the Block.

Agriterra CEO Andrew Groves said, "I would like to take this opportunity to thank all parties involved in the completion of the sale of South Omo, in particular, the Government of Ethiopia, Marathon Oil, and our partners in the Block, Tullow Oil and Africa Oil.  This injection of capital into our business, representing approximately 50% of our market capitalisation, will facilitate our rapid expansion plans across all our agricultural divisions, enabling the Group to become a significant pan-African food producer and processor."

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For further information please visit www.agriterra-ltd.com or contact:

Andrew Groves            Agriterra Ltd                                        Tel: [phone]

David Foreman            Seymour Pierce Ltd                              Tel: [phone]

Rick Thompson            Seymour Pierce Ltd                              Tel: [phone]

Andy Cuthill                 MC Peat & Co LLP                             Tel: [phone]

John Beaumont                 MC Peat & Co LLP                             Tel: [phone]

Susie Geliher                St Brides Media & Finance Ltd            Tel: [phone]

Notes

Agriterra Ltd is an AIM listed agricultural company with five divisions: beef, maize, cocoa, fruit and palm oil.  Its cattle ranching business, Mozbife, has a herd in excess of 5,400 head, a land holding of over 21,000 hectares, a feedlot, a 4,000 head per month capacity abattoir and retail units.  In addition to selling meat from its own herds, throughput for the feedlot and abattoir will be supplemented using cattle bought in from local communities.  Agriterra also owns a proximal banana plantation and macadamia orchard.

Agriterra's maize buying and milling operations, DECA and Compagri, are located in Chimoio and Tete in central and north-western Mozambique respectively.  These collect maize from circa 350,000 farmers using Agriterra's own vehicle fleet, process it into maize meal, the African staple, and then sell it back to the local market, into supermarkets and to the World Food Programme.

Agriterra's cocoa business is based in Sierra Leone, through its 100% subsidiary Tropical Farms Limited, which is currently a buying and trading operation, but provides an ideal conduit to branch out into cocoa production in West Africa.  Its strategy is to establish itself as a secure, sustainable and traceable source of supply to meet the requirements of the major cocoa consumers who are placing increased emphasis in this area.

Agriterra has expanded its portfolio of agricultural products through the addition of palm oil, and holds a lease over approximately 45,000 hectares of brownfield agricultural land in an area suitable for palm oil production in the Pujehun District in the Southern Province of Sierra Leone.  This area of Sierra Leone, which is close to the Liberian border, receives one the highest levels of rainfall in Sierra Leone, which in itself, receives some of the highest rainfall globally.  In addition, the lease area is located on the equatorial belt, which is the most favourable geographical location for palm oil production. 

 

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