Feronia, an agribusiness company operating in the DRC, has entered into USD 17.5mn private placement agreement with Kuramo Capital Management and Mafuta Investment Holding. Funds will go towards expansion and working capital for its palm oil business. Kuramo is also granted the right to nominate up to three directors as part of the deal.
Prior to the closure of the private placement, which is expected to be at the end of October, Kuramo has provided Feronia with an unsecured term loan facility of up to USD 4mn while the two parties work through the closing conditions of the private placement.
At the core of Feronia’s portfolio is its palm oil business, Plantations et Huileries du Congo, which it acquired from Unilever in 2009. In November 2015, the UK’s development finance institution CDC acquired a $10 million debenture in the firm to support Feronia’s three, long-established plantations, Lokutu, Yaligemba and Baketa, which had suffered from years of underinvestment and disruption caused by regional conflicts. The plantations produce crude palm oil and palm kernel oil, providing livelihoods for more than 8,000 people who are either directly or indirectly employed by the company. Proceeds from the private placement have been earmarked for working capital purposes as well as support of the firm’s expansion plans for its palm oil business.
“We are looking forward to working with the existing shareholders and management of Feronia to build a great agri-business in Africa,” commented Walé Adeosun,Kuramo’s Founder and Chief Investment Officer. “We particularly appreciate the opportunity of working, once again, with CDC Group with which we have had previous co-investments.”
It’s anticipated that the deal will lose at the end of October. Until them, two of Kuramo’s funds are providing Feronia with an unsecured loan facility up to $4 million whilst the parties work through the necessary closing steps.