DekelOil Public Limited (LON:DKL) is increasing its stake in the Ayenouan palm oil operation in the Ivory Coast to 81.5% from 51%, funded by a £10.8mln share placing.
Institutions and other investors, including chief executive Youval Rasin, are acquiring stock at 1.325p a share, a modest premium to last night’s closing price.
Rasin is buying just under 75.5mln shares, bringing his total holding in Dekel up to 20.4%. Yehoshua Shai Kol, chief financial officer and the firm’s co-founder, is selling 22.6mln.
As part of the process, there will be a 10-for-1 share consolidation.
The transaction is expected to be earnings enhancing.
Dekel said by securing a greater proportion of Ayenouan's revenues and cash flows it would be better placed to accelerate growth plans.
Director Lincoln Moore said the opportunity was “one we could not let pass” as he told investors the firm had secured a deal on “acceptable terms for shareholders”.
“As our recent full year results demonstrated, Ayenouan has the potential to be both highly cash generative and profitable for many years to come,” he added.
The shares reacted positively, adding 6% to move to 1.38p, valuing the business at £21mln.
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