Toronto, Sept. 4 - TriNorth Capital Inc. is pleased to announce its subsidiary, Feronia Inc., a company it founded to engage in agribusiness in Africa, has concluded the purchase of a 76.2% ownership stake in Plantations et Huileries du Congo S.C.A.R.L. The terms of the transaction are subject to a confidentiality agreement between Feronia Inc. and Unilever plc.
"The purchase by Feronia of this business from Unilever plc is consistent with TriNorth's strategy of long-term global investing, with a special focus on agricultural land and commodities, to generate long-term capital growth for shareholders," said Trinorth Director Ravi Sood. "This is a unique asset that we expect will be the basis for the rapid expansion of Feronia throughout Sub-Saharan Africa. Feronia has the potential to reproduce the agricultural revolution that has occurred in Brazil over the past 30 years."
"We are very enthusiastic about the long-term potential of PHC and the implementation of large-scale mechanized farming in the Democratic Republic of Congo and elsewhere in Sub-Saharan Africa," said James Siggs, CEO of Feronia Inc. "We look forward to working with PHC's team, whose expertise is unparalleled in the agriculture industry in Africa."
Located in the Democratic Republic of Congo, PHC has been in operation for almost 100 years and has virtually all required infrastructure for planting and production. The region has consistent rainfall, and the land is among the highest quality in the world. PHC has long-standing relationships with the local communities and government, and a stable and highly trained workforce of approximately 4,300.
The plantation produces primarily palm oil from its three properties. Palm oil is a commodity with a rapidly growing demand throughout the world. Of the approximately 100,000 hectare plantation, 70,000 hectares are suitable for planting palm oil. Approximately 15,000 hectares are currently planted, and Feronia PHC expects to expand plantings consistently for many years to fully utilize the land available.
Capital expenditures made by Feronia will be primarily on new plantings. Feronia will be acquiring PHC unencumbered by any debt.
Feronia is currently closing an equity issue to finance the acquisition and refurbishment and expansion of the plantation. TriNorth is investing approximately $2 million in this private placement. In addition, a number of international funds are participating in this financing as are funds managed by Lawrence Asset Management Inc. After the completion of this financing, TriNorth will own approximately 40% of Feronia.
The development of Feronia is consistent with Trinorth's objective of providing investors exposure to early-stage investments with a particular focus on attractive farmlands. With its ownership in Feronia and Wild Horse Farms of Saskatchewan, Trinorth provides Canadian investors a unique exposure to two of the most attractive areas in global agriculture from a risk-reward perspective.