Agriterra Ltd on Friday said it has inked a $2.9 million trade finance package with its major shareholder, Magister Investments Ltd.
The Guernsey-based agricultural investment company said that it has concluded a trade finance package with Magister Investments, the company’s 50.58% shareholder.
The package includes a new debt funding of $2.9 million, together with an extension to the $1.8 million convertible loan facility provided by Magister announced July.
Agriterra said this will significantly reduce the finance costs associated with maize purchasing in Mozambique by the company’s wholly-owned subsidiary, Desenvolvemento E Comercializacao Agricola Limitada.
It will also facilitate the purchase by DECA of various capital equipment which will be employed by its operations in Mozambique to ‘drive growth through accessing new revenue streams and improving operational efficiencies.’
Agriterra noted that the finance deal will replace the external finance provided by First Capital Bank SA.
Executive Chair Caroline Havers said: ‘The purchasing aspect of our maize treatment and processing operations in DECA have typically been financed by local external lending. By securing finance from Magister to purchase maize, we will significantly reduce our purchasing costs and position DECA to generate strong revenues from its maize meal sales, during the selling season.’
Shares in Agriterra were untraded at 1.28 pence each in London on Friday morning.
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