Presco Plc says it has reached an agreement to acquire 100 percent equity in Ghana Oil Palm Development Company (GOPDC) for $124.93 million.
The company also proposed to acquire Saro Oil Palm (SOP) for $46.71 million as part of its expansion strategy — bringing the proposed acquisition expenditure to a total of $171.64 million.
Presco is a Nigerian agro-industrial company with oil palm plantations, a palm oil mill, a palm kernel crushing plant, and a vegetable oil refining plant.
In a notice to shareholders on Thursday, Frederick Ichekwai, the company secretary, said the acquisitions will deepen the company’s footprint in the West African agro-industrial sector.
Advertisement
He said the expansion plan would increase Presco’s processing capacity and strengthen its integrated palm oil value chain.
“In line with this objective, a detailed review of the strategic opportunities available to the Company was explored and the Board reached a decision to Acquire 100% equity stake in GOPDC for USD124,926,600 (One Hundred and twenty four million, Nine hundred and twenty six thousand, six hundred United States dollars only), and proposes to acquire SOP for a consideration of USD46,710,526 (Forty-six million, seven hundred and ten thousand, five hundred and twenty-six United States dollars),” the notice reads.
Presco said a rights issue is being proposed to raise additional capital to fund the acquisitions, refinance existing debt, and support other strategic initiatives.
Advertisement
“To support the execution of the Company’s strategic initiatives and ensure a strong financial foundation, the Board has proposed raising up to N250,000,000,000 through a Rights Issue to existing shareholders,” the company said.
“The proceeds from the Rights Issue will be deployed towards the refinancing of existing debt obligations, settlement of the outstanding consideration for the 100% acquisition of GOPDC, settlement of the consideration for the Proposed Acquisition of SOP and creation of a financial buffer to support business expansion.”
Ichekwai said at the 2024 annual general meeting (AGM), shareholders had approved the business expansion plan and the acquisition of GOPDC.
However, he said the board decided to resubmit the resolutions for ratification alongside the new proposal for SOP due to ongoing litigation.
Advertisement
“We therefore respectfully invite shareholders to ratify the Acquisition of GOPDC and consider for approval the Proposed Acquisition of SOP,” the company added.
Presco added that the two acquisitions would create “operational synergies” and position the company to meet rising demand for refined vegetable oils and by-products in the region.
