Long-Term Debt Refinancing

Dekel Agri-Vision Plc / Index: AIM / Epic: DKL / Sector: Food Producers

Dekel Agri-Vision Plc ('Dekel' or the 'Company')
Long-Term Debt Refinancing

Highlights

·    New c.€15.2 million bond facility, approved by the Ivorian regulator, forms part of long-term refinance programme to extend maturity of debt profile to strengthen the balance sheet and facilitate the roll-out of Dekel's growth strategy to become a multi-project, multi-commodity agriculture company

·    First approximately €5 million tranche of seven-year bond issued to replace short term debt and provide funding support for cashew project as it nears first production in Q2 2021

o  Three-year capital grace period enables higher proportion of operating cash flows to be retained and reinvested

·    Institutional subscribers to credit-rated bond include banks, pension funds, and insurance companies across West African region

Dekel Agri-Vision Plc, the West African focused agriculture company, is pleased to announce the launch of a c.€15.2 million seven-year bond facility (the 'New Bond').  A first tranche of the bond, totalling approximately €5m, has been issued to regionally focused institutions including banks, pension funds and insurance companies.  The New Bond is part of an ongoing programme to extend the maturity of Dekel's debt profile and follows the €7.2 million, four-year capital holiday, 10-year loan facility secured with AgDevCo Limited, a leading African agriculture sector impact investor (see announcement of 22 July 2019 for further details). 

The New Bond includes an initial three-year capital repayment holiday.  During this period, the New Bond will be interest-only chargeable at an annual rate of 7.75%.   At the expiry of this initial three-year period, the capital repayments of the first tranche of the New Bond will be €1.25 million per annum during years four to seven of the loan.  Approximately €2.6 million of the proceeds of the first tranche of the New Bond will go towards replacing a short-term debt facility with the remainder of the proceeds of the New Bond being used to provide a working capital cushion for the cashew processing project in Tiebissou, Cote d'Ivoire, which is expected to commence production in Q2 2021.   

The Company will consider the issue of further tranches of the New Bond as part of its ongoing debt refinancing programme and expansion plans. 

Dekel Agri-Vision Plc Executive Director Lincoln Moore said: "The c.€15.2m New Bond facility represents an endorsement, from both local and international institutions, of our collaborative business model which places local smallholders and communities at the centre of operations. Importantly, it also substantially strengthens our funding platform for the growth plans we have in place to transform Dekel into a West African focused multi-project, multi-commodity agriculture company. 

"This transformation will start with the Tiebissou cashew project which, when operations commence in Q2 2021, will become Dekel's second producing asset alongside our established palm oil operations at Ayenouan. We will then look to expand processing capacity at Tiebissou in stages so that within three years the plant can process 30,000tn of raw cashews a year.  At this point, we expect to have added a third commodity to our portfolio following the completion of an internal feasibility study last year. 

"We anticipate that a portfolio of three producing projects comprising palm oil at Ayenouan, cashews at Tiebissou and the third crop could generate substantial and stable cash flow without the volatility associated with having exposure to only a single commodity. The Board believes this will not only allow Dekel to either pay down debt or access lower cost financing to fund future growth plans, but at the appropriate time, recommence a dividend programme, thereby providing shareholders with a yield as well as capital growth."

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014.  Upon the publication of this announcement via a Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain.

ENDS

For further information please visit the Company's website www.dekelagrivision.com or contact:

Notes:

Dekel Agri-Vision Plc is a multi-project, multi-commodity agriculture company focused on West Africa.   It has a portfolio of projects in Côte d'Ivoire at various stages of development: a fully operational palm oil project in Ayenouan where fruit produced by local smallholders is processed at the Company's 60,000tpa crude palm oil mill; a cashew processing project in Tiebissou, which is due to commence production in Q2 2021.