Dekel Agri-Vision PLC Acquisition of controlling stake in cashew project (0878E)
November 03 2020 - 3:45AM
UK Regulatory
TIDMDKL
RNS Number : 0878E
Dekel Agri-Vision PLC
03 November 2020
Dekel Agri-Vision Plc / Index: AIM / Epic: DKL / Sector: Food
Producers
Dekel Agri-Vision Plc ('Dekel' or the 'Company')
Agreement to acquire controlling interest in large scale cashew
project
Highlights
-- Acquisition of additional 14.2% interest in the large scale
raw cashew nut processing project at Tiebissou, Côte d'Ivoire
-- Increases Dekel's ultimate ownership interest in the Cashew Project to 52%
-- The Board believes the transaction represents excellent value
for Dekel shareholders as the cashew plant approaches completion in
Q2 2021
Dekel Agri-Vision Plc, the West African focused agriculture
company, announces that it has agreed to acquire an additional
14.2% interest in the large scale raw cashew nut ('RCN') processing
project at Tiebissou, Côte d'Ivoire (the 'Cashew Project'), which
together with issuing the shares to Concordia Corporation Ltd
('Concordia') pursuant to the May 2019 announcement will increase
the Company's interest in the Project to a controlling stake of 52%
('Transaction'). In summary, Concordia has agreed to transfer a
beneficial interest in 14.2% of the Project to Dekel in
consideration for 28,551,800 Ordinary shares ('Consideration
Shares').
The Transaction will be subject to the terms of an exchange
agreement entered into by the Company and Concordia. Under the
terms of the Agreement, Concordia will exchange a 14.2% beneficial
interest in Pearlside Holdings Ltd ('Pearlside'), the wholly owned
parent of Capro CI SA, the entity developing the Project, for 6.3%
of Dekel (28,551,800 shares) (the 'Consideration Shares'). The
Consideration Shares will be subject to a 12 month lock-in period
and an orderly market undertaking thereafter. Completion of the
Transaction will take place once formalities have been completed by
Pearlside in order for the Company and Concordia's respective
shareholdings in Pearlside to be registered. It is expected that
this will take place in the next 30 days.
Since 30 May 2019 when Concordia invested EUR1 million in to
Pearlside at an implied EUR6 million pre-money valuation, the
Project has seen 18 months of progress including completion of 90%
of earthworks, the shipment of the majority of equipment to site
from China and Italy (with the final shipment due in the coming
months) and the advancement of the building structures. The plant
remains on track to be commissioned in Q2 2021. As a result of
these key milestones, both Dekel and Concordia consider that the
valuation of Pearlside has materially increased to approximately
EUR9 million. The consideration also reflects that Concordia
believes that there is value in Dekel shares which is not currently
reflected in the share price, accordingly the Directors have been
able to structure a transaction which they believe delivers value
for all Dekel shareholders.
On completion of the acquisition, Dekel will consolidate
Pearlside Holdings Limited. As at the 30 June 2020, Pearlside had
total assets of EUR7.5 million and total liabilities of
EUR5.5million. As the RCN is under construction Pearlside has no
trading revenues or profits.
Dekel continues to retain an option over a further 16.7%
interest in Pearlside.
Cashew Project set to transform Dekel's financial profile
The Cashew Project is being developed to capitalise on a major
shortfall in cashew processing capacity in Côte d'Ivoire. One of
the world's largest cashew growers, Côte d'Ivoire produced c.
750,000 MT of RCN in 2018 but of these only around 70,000 MT or 9%
were processed in-country. Whilst local processing capacity is
increasing, the Company believes that RCN supply will outstrip
demand for the foreseeable future. In line with this, the Cashew
Project is undergoing a phased development and it is anticipated
that it will have an initial annual capacity to process 10,000
tonnes of RCN. Phase 2 will target production at the plant
increasing by up to 50% to 15,000 tpa within a 24 month timeframe.
This can be achieved at no extra capital outlay by increasing the
number of shifts of employees at the plant from two to three per
day. Phase 3 of the development involves the targeted doubling of
capacity to 30,000 tpa.
Dekel Agri-Vision Plc Executive Director Lincoln Moore said:
"With construction advancing well,, we believe this is the right
time to deliver on our long-standing objective to secure a
controlling interest in the Cashew Project at Tiebissou which we
believe has taken place on materially accretive terms for
Dekel.
"This Acquisition serves to demonstrate that Dekel's strategy
both to diversify and scale its operations is coming to fruition.
We look forward to continuing to update shareholders with the
advancing construction works at the Cashew Project over the coming
months."
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ('MAR'). Upon the
publication of this announcement via a Regulatory Information
Service ("RIS"), this inside information is now considered to be in
the public domain.
** ENDS **
For further information please visit the Company's website
www.dekelagrivision.com or contact:
Dekel Agri-Vision Plc
Youval Rasin
Shai Kol
Lincoln Moore +44 (0) 207 236 1177
Arden Partners Plc (Nomad and Joint Broker)
Paul Shackleton / Ruari McGirr /
Dan Gee-Summons (Corporate Finance)
Simon Johnson (Corporate Broking) +44 (0) 207 614 5900
Optiva Securities Limited (Joint Broker)
Christian Dennis
Jeremy King +44 (0) 203 137 1903
St Brides Partners Ltd (Investor Relations)
Frank Buhagiar
Cosima Akerman
Megan Dennison +44 (0) 207 236 1177
Notes:
Dekel Agri-Vision Plc is a multi-project, multi-commodity
agriculture company focused on West Africa. It has a portfolio of
projects in Côte d'Ivoire at various stages of development: a fully
operational palm oil project in Ayenouan where fruit produced by
local smallholders is processed at the Company's 60,000tpa crude
palm oil mill; a cashew processing project in Tiebissou, which is
due to commence production in Q2 2021.
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END
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