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Agriterra Ltd is an AIM listed pan-Arican agricultural company with established beef, cocoa trading, maize processing and palm oil operations.
Agriterra raises US$15 mln in premium cash call to expand African Agri-businessDecember 01 2011, 3:52pm
The company has issued 320 million new shares priced at 3p each, some 32 per cent higher the prior market price.
“The US$15 million dollars raised at a significant premium underpins the potential our investors see in the business and endorses the progress that we have made,” said Agriterra director Andrew Groves.
On AIM Agriterra shares gained 0.425p, or 18.7 per cent, to trade at 2.7p a share.
Agriterra said that the new cash will fuel its expansion of its pan-African agricultural operations.
Part of that expansion will include a palm oil operation. It said that palm oil is an attractive commodity to complement the group’s current agricultural portfolio of cattle ranching, cocoa buying and trading and maize farming and milling operations.
This afternoon the company announced that it has already acquired a lease over 45,000 hectares of brownfield agricultural land. This is in an area of Sierra Leone that is suitable for palm oil production.
Meanwhile some of the placing proceeds has also been earmarked for Agriterra’s beef ranching business. Here the firm aims to increase its total breeding herd size from 1,000 head to 5,000 by 2012 and to 10,000 by 2015.
It also plans to build a 4,000 head per month capacity abattoir on schedule for commissioning in the second quarter of next year.
Elsewhere funds will also be used to expand Agriterra’s cocoa buying and trading operations.
Groves added: "We are extremely excited about the prospects of the company as a multi-project and multi-commodity group with financing in place to achieve our rapid development plans as we remain focussed on capitalising on the growing agricultural market in sub-Saharan Africa and becoming a leading food provider.
“The potential upside in our sector is considerable, supported by forecast global demographic changes, and we believe we have a business that will deliver value for its shareholders."