Walé F. Adeosun, Founder and Chief Investment Officer of Kuramo Capital Management
Straight KKM 2 Limited enters into agreements to acquire common shares of Feronia Inc.
TORONTO, Sept. 25, 2017 /CNW/ - Straight KKM 2 Limited ("KKM"), a newly formed entity incorporated in Mauritius primarily owned by a number of funds for which Kuramo Africa Opportunity Offshore Fund II GP Ltd. acts as general partner and Kuramo Capital Management, LLC acts as fund manager, announces that it has entered into a subscription agreement with Feronia Inc. ("Feronia") to acquire 121,819,444 common shares ("Common Shares") of Feronia, representing approximately 25.18% of the issued and outstanding common shares of Feronia (assuming completion of the Private Placement) (the "Private Placement").
In addition, following the signing of the subscription agreement, KKM entered into a sale and purchase agreement with CDC Group plc ("CDC") to acquire from CDC 61,337,833 Common Shares (the "KKM Acquisition"), representing approximately 12.68% of the issued and outstanding Common Shares (assuming completion of the Private Placement).
KKM currently holds no securities of Feronia. Assuming completion of the Private Placement and the KKM Acquisition, KKM will have ownership of and control over 183,157,277 Common Shares, representing approximately 37.86% of the issued and outstanding Common Shares.
As of the date hereof, prior to the closing of the Private Placement and the KKM Acquisition, CDC holds 244,495,111 Common Shares, representing approximately 67.56% of the issued and outstanding Common Shares. Following the closing of the Private Placement and the KKM Acquisition, CDC will own 183,157,278 Common Shares, representing approximately 37.86% of the issued and outstanding Common Shares.
The acquisition of the Common Shares pursuant to the Private Placement will be at a price of CAD $0.18 per Common Share, for an aggregate subscription price of CAD $21,927,500. The acquisition of the Common Shares pursuant to the KKM Acquisition will be at a price of CAD $0.23 per Common Share, for an aggregate acquisition price of CAD $14,107,702.
Closing of the Private Placement and KKM Acquisition are subject to certain conditions, including clearing personal information forms with the TSX Venture Exchange (the "TSX-V") for principals of KKM and the approval by the TSX-V of the Private Placement. As KKM will become a control person of Feronia on closing of the Private Placement, Feronia has obtained the written approval of its two largest shareholders for the Private Placement, as required by the rules of the TSX-V.
KKM intends to acquire the Common Shares pursuant to the transactions described herein for investment purposes. KMM will monitor the business, prospects, financial condition and potential capital requirements of Feronia. Depending on its evaluation of these and other factors, KKM may, from time to time in the future, increase or decrease its ownership, control or direction over the Common Shares or other securities of Feronia through market transactions, private agreements, subscriptions from treasury or otherwise.
CDC's disposition of the Common Shares was undertaken in the ordinary course of its business as a development finance institution. CDC may increase or decrease its investment in Feronia at any time depending on market conditions and any other relevant factors, subject to compliance with applicable law.
KKM and CDC will file early warning reports pursuant to National Instrument 62-104 Take-over Bids and Issuer Bids on SEDAR (www.sedar.com) under Feronia's SEDAR profile. Feronia's registered address is: Suite 1800, 181 Bay Street, Toronto, Ontario M5J 2T9.
September 25, 2017
TORONTO, ONTARIO--(Marketwired - Sept. 25, 2017) -
Feronia Inc. ("Feronia" or the "Company") (TSX VENTURE:FRN) is pleased to announce that it has entered into a subscription agreement for the private placement (the "Private Placement") of US$17.5 million of common shares in the capital of the Company ("Common Shares") with Straight KKM 2 Limited ("KKM"). KKM is a newly formed entity which is owned by a consortium consisting of a number of funds managed by Kuramo Capital Management, LLC ("Kuramo"), as well as Kalaa Mpinga, a successful Congolese entrepreneur, though his holding company Mafuta Investment Holding Limited.
Proceeds from the Private Placement shall be used for working capital purposes and to provide expansion capital for the Company's palm oil business in the Democratic Republic of the Congo.
Mr. Frank Braeken, Chairman of Feronia, commented: "As a leading investor in sub-Saharan Africa, Kuramo is focused on capturing the tremendous growth opportunity the region has to offer. Kuramo's investment in Feronia, together with the involvement of Kalaa Mpinga, brings considerable expertise and experience to the Company, highlights the operational and commercial progress we are making and underlines the opportunities which lay before us."
Mr. Walé F. Adeosun, Founder and Chief Investment Officer of Kuramo Capital Management commented: "We are looking forward to working with the existing shareholders and management of Feronia to build a great agri-business in Africa; we particularly appreciate the opportunity of working, once again, with CDC Group with which we have had previous co-investments. CDC Group's approach to investing in Africa in order to create jobs and make a lasting difference to people's lives supports our view on how to build long-term value for investors."
Mr. Kalaa Mpinga, Founder and Chief Investment Officer of Mafuta Investment Holding Limited commented: "We hope that this investment draws attention within the local and international community as to the great potential of the DRC and, in particular, its agricultural sector. Feronia is playing a leading role in helping the DRC regain self-sufficiency in the supply of palm oil to its vast and rapidly growing population of over 80 million people, thereby replicating the success of many other African countries which have revitalized their palm oil industries."
Closing of the Private Placement is conditional upon certain conditions precedent, including clearing personal information forms with the TSXV for certain principals related to KKM. Pursuant to the Private Placement, KKM is to be granted certain investor rights including the right to nominate up to three directors to the board of directors of the Company. Based on a fixed exchange rate of Cdn.$1.253 per US$1.00, the Company shall issue 121,819,444 Common Shares pursuant to the Private Placement at a price of Cdn.$0.18 per Common Share.
The Company anticipates closing the Private Placement by the end of October 2017. Two of the funds managed by Kuramo have provided the Company with a unsecured term loan facility (the "Loan Facility") for up to US$4,000,000 for the period during which the parties work through the closing conditions of the Private Placement. Funds provided to the Company through the Loan Facility shall be treated as an advance by the lenders on behalf of KKM for its subscription for Common Shares pursuant to the Private Placement.
As KKM will become a control person of the Company, pursuant to the rules of the TSXV, the Company has obtained the written approval of its two largest shareholders for the Private Placement. The Private Placement is subject to the approval of the TSXV and the Common Shares issued pursuant to the Private Placement are subject to a four month statutory hold period.