AFGRI Group Holdings creates investment holdings company AGH and raises additional capital to fuel growth in agriculture, food processing and financial services

AFGRI Group Holdings, going forward to be known as AGH, is an investment holding company born of the recent reorganisation of one of South Africa’s leading agribusinesses and its associated businesses. AGH has raised R1 billion of additional capital from its shareholders for strategic acquisitions in three focused investment areas namely, agriculture, food and financial services.

The group delisted from the JSE four years ago through an offer to shareholders and minorities. Shareholders in the current structure include Fairfax, which has a shared focus on enabling food security across the continent, the broad-based BEE consortium, Bafepi Agri Proprietary Limited, and management. This is further supported by a holding by the Public Investment Corporation (“PIC”), South Africa’s largest asset manager with assets under management of around R2 trillion.

According to Chris Venter, the CEO of AGH, having international shareholders does not in any way diminish the support the company provides.

“In fact, we have more opportunities now, largely due to pools of funding available that are being used to grow the business.” He explains that the current AGH structure is set to expand, with the fundamental purpose of being an enabler to food security across Africa.

In the three focus areas, AFGRI is its largest agricultural investment, Philafrica Foods consolidates its current food investments and GroCapital Holdings, completing the trio, will be the ultimate owner of the South African Bank of Athens (“SABA”), with final approvals for the transaction being imminent.

“This is an exciting avenue for AGH, and this is where the advantage of having like-minded shareholders such as Fairfax, PIC and Bafepi comes into play, allowing us to raise R1 billion to enable our growth strategy.”

The biggest part of the new capital raised will be focused on the expansion of Philafrica Foods. The company has capabilities that include grain and maize milling, soya crushing and oil and seed extraction processing, and has most recently added cassava processing in Africa to its repertoire. It also manufactures dog food and animal feeds, is involved in poultry production in Mozambique and today announced the acquisition of Pakworks.

Over the past two years AFGRI has grown its agricultural footprint in Australia through investments totalling R500 million, and now owns and manages the largest John Deere dealership in Australia. “These investments were made using our own funds,” Venter indicated.

The third leg of the AGH investment holding structure is financial services. “This is a broad offering and covers aspects ranging from access to finance through to trading of future contracts to sophisticated debtor products and the funding of agricultural businesses.”

Venter believes that AGH has a good partnership with Land Bank, “which we intend to grow in the years to come. We trust that we will be able to further expand our product offering through the acquisition of SABA.”

Venter says that another coupe within the financial services cluster is the eagerly-anticipated final approval of the purchase of SABA by the Competition Commission, following the announcement in March 2017 that the group had acquired the National Bank of Greece Group’s stake in SABA, corresponding to 99.81% of the issued share capital of the bank.  “We are confident that a statement will be released shortly.”

A portion of the capital raised has gone towards this acquisition.

Geographically, AGH has a presence in South Africa, Africa and Western Australia through its invested companies. “Our footprint is large and our association with leading brands is strong. We are the largest John Deere agency outside of North America, not by chance, but by dedication to providing farmers what they need and ensuring that our back-up service is outstanding. Furthermore, by partnering with world-class brands such as John Deere, we can ensure leading-edge solutions are easily at hand.”

Venter concludes that AGH, through its invested businesses, is poised to grow into a holistic service provider to the agricultural and food processing markets. “We are looking towards innovation to ensure we are there to support farmers and food-related businesses alike for years to come, building on our solid reputation established over the past 95 years.”

 


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Farmers Review Africa
Farmers Review Africa