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£1.5 million Fundraise and Grant of Share Options
DekelOil Public Limited, the West African focused palm oil producer with a 51% interest in a vertically integrated palm oil project in Ayanouan, Côte d’Ivoire, announces that it hasraised £1.5 million before expenses through a placing of 87,200,000 new ordinary shares of €0.00003367 each in the capital of the Company and a subscription of 35,706,720 Ordinary Shares with new and existing investors at 1.25 pence per share. The net funds raised will enable the Company to invest in a new kernel crushing plant at Ayanouan.
The addition of the kernel crushing plant will allow the Company to extract further value from the kernels from its operational 60t/hr Crude Palm Oil extraction mill, one of West Africa’s largest. It is expected that once contracted, the kernel crushing plant will begin operations in Q4 2015, and will allow the Company to sell both Palm Kernel Oil and animal feed in the local market.
Highlights:
• £1.5 million raised via the Fund Raise to fund construction of 60tn/day kernel crushing plant which will materially increase profitability of Ayanouan project
• Low capex requirement of £1.1 million with highly attractive payback credentials
• Strong local demand will allow Palm Kernel Oil and Animal Feed produced by the plant to be sold at the factory gate which will have a positive impact on margins
• Discussions underway with regards to securing local offtake agreements
• Tendering process for the plant on-going and the Company will announce the successful party in due course – plant to be operational by Q4 2015
Under the terms of the investment agreement, DekelOil will invite its JV partner to match fund the investment required for the kernel crushing plant. In the event that the JV partner elects to co-invest in the kernel crushing plant any excess funding will be used to expand the existing Company-owned plantations at Ayanouan. The Company will provide a further update on the level of its intended expansion once funding arrangements have been finalised.
Lincoln Moore, Executive Director, said: “The 60tn/day kernel crushing plant will further improve the already highly attractive economics of our project in Ayanouan. Today’s fundraise allows us to fast track construction of the new plant, which in turn will allow us to satisfy the strong local demand we are seeing for palm kernel oil and animal feed and in the process secure more of the available value for DekelOil. In a short space of time, we have transformed DekelOil into a revenue generative vertically integrated palm oil business. As well as one of West Africa’s largest CPO mills, our operations at Ayanouan include long term agreements covering 27,000 hectares of mature plantations, 2,000 hectares of Company owned planted estates, a state of the art nursery, and an expanding logistics network. Combined, Ayanouan provides us with a platform from which we can capitalise on a number of value enhancing opportunities, such as the kernel crushing plant, as we focus on building DekelOil into a leading West African palm oil company.”
The Board is also pleased to report that following detailed discussions, it expects its current term facility with BOAD to extend payment terms by a further 12 months to 31 January 2016. Further updates will be made in due course.
