News blog

Agriterra Ltd

  • BY: Andrew Hore |
  • POSTED: 18/08/2009 |

Agriterra Ltd intends to widen the range of agricultural products it handles through the proposed acquisition of Equatorial Biofuels (Guernsey) Ltd.

The acquisition is still subject to due diligence. The purchase price is $12m - $2m in cash and 110m shares.

Equatorial Biofuels is developing existing palm oil plantations in Liberia. There is potential to reactivate 10,000 hectares of plantations in the short-term. The agricultural land bank covers 169,000 hectares. The business plans to employ 5,000 Liberians by 2017. Liberia is currently a net importer of crude palm oil.

Although the name Equatorial Biofuels suggests that the palm oil will be used for fuel, Agriterra says that the focus will be on producing palm oil for human consumption.

The existing activities of Agriterra cover grain processing and cattle ranching in Mozambique. Liberia is a long way away from Mozambique so this could bring some additional management challenges. The attraction is that Agriterra will have activities operating all around the year and a diversification of geographic risk.

A 0.25p rise in the share price has taken it to 5.5p, which increases the company’s value to £26.1m.

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