Acquisitions in African Agricultural Businesses

RNS Number : 3270S

Craven House Capital PLC

06 November 2013

 



6 November 2013

Craven House Capital Plc

("Craven House" or the "Company")

Acquisition of 49% interest in three African agricultural businesses

The Company today announces that it has acquired through EmVest Asset Management ("EmVest"), a 49% interest in three businesses focused on food and agriculture in sub-Saharan Africa for a total consideration of CAD$1,960,000. Simultaneously, the shareholders of EmVest have agreed to subscribe for 94,322,598 new ordinary shares of 0.1 pence each in the Company ("Ordinary Shares") for 1.25p per share, amounting to an aggregate subscription of £1,177,000 (approximately equivalent to CAD$1,960,000).

Background on EmVest

EmVest is a diversified, agricultural investment company operating in Sub Saharan Africa. EmVest currently operates agricultural assets in 3 countries, operating farms and businesses across the food production value chain.  EmVest is now looking to divest itself of certain assets in order to re-allocate capital to other projects.

The three businesses in which Craven House is acquiring a 49% stake from EmVest are involved in the production, processing and distribution of food in South Africa, as follows:

EmVest Barvale (Pty) Ltd ("Barvale")

Barvale is a 1,017 hectare vegetable and cattle farm, lying 24km west of Nelspruit, South Africa. It has been a productive farm for a number of decades. The site is owned freehold and benefits from an abundant water supply via two rivers that run directly through the property over which the farm has water rights to feed its efficient, canal-based, water management system. The climate in the area where Barvale is located is mild and allows for year-round vegetable production. The crop is supplied to local retail markets, the Evergreen business and is exported into the EU via on-site packing facilities.  In the year to 31 March 2013, Barvale made a loss of SAR6.0m on turnover of SAR3.6m.

EmVest Evergreen (Pty) Ltd ("Evergreen")

The Evergreen business dehydrates vegetables that are sold for various end uses, such as soup production, with a capacity to process over 120 tons for vegetables per day including; onions, carrots, cabbages, green beans, potatoes and chicory. Evergreen's clients include multi-national food producers such as Unilever, Crown National and Tiger Brands. The factory is located within the Barvale farm, which produces a proportion of Evergreen's raw vegetables. Over time, management plan to secure all of the plants vegetables from the farm and thus reduce its reliance on other local farmers.  In the year to 31 March 2013, Evergreen made a loss of SAR4.8m on turnover of SAR7.0m.

The land on which Evergreen's factory stands is held by EmVest Evergreen Properties (Pty) Ltd in which Craven House is also acquiring a 49% stake as part of this transaction.

EmVest Foods (Pty) Ltd ("EmVest Foods")

EmVest Foods focus on the marketing and distribution of fresh fruit and vegetables in southern Africa at a facility located in Olifantsfontein, close to the cargo division of Johannesburg's international airport.  EmVest Foods is strategically positioned between the distribution centres of three of the largest retailers in South Africa and channels the various products of the Group through one entity providing the critical mass that is needed to negotiate supply contracts with large retailers.  In the year to 31 March 2013, Emvest Foods made a loss of SAR5.9m on turnover of SAR2.6m

Mark Pajak, Acting Chairman, commented, "We are delighted to announce this investment, which represents an outstanding opportunity to establish an interest in food production and processing in South Africa. The assets we have acquired an interest in have benefitted from considerable investment from EmVest in recent years. Whilst the businesses have been constrained over the past year and have been running below capacity, we believe that with the introduction of additional working capital they can quickly be returned to profitability."

Application has been made to the London Stock Exchange for the new Ordinary Shares to be admitted to trading on AIM. Admission is expected to take place on 11November 2013. The shares will rank pari passu with the existing issued ordinary shares.

Following the issue of the new ordinary shares, the Company's total issued share capital will consist of 687,018,557 ordinary shares with each share carrying the right to one vote. The Company has no ordinary shares held in treasury. The total of 687,018,557 ordinary shares may therefore be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FSA's Disclosure and Transparency Rules.

For further information please contact:

Craven House Capital Plc:
www.cravenhousecapital.com
Alexandra Eavis Non Executive Director & Company Secretary	Tel: [phone]
Daniel Stewart & Company Plc: (Nominated Adviser & Broker)
Antony Legge/James Thomas	Tel: [phone]

 

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