Subject: FINANCING AGREEMENTS
Feronia Announces Closing of Third Drawdown on $49M Term Facility
TORONTO, ONTARIO--(Marketwired - June 9, 2017) - Feronia Inc. ("Feronia" or the "Company") (TSX VENTURE:FRN) is pleased to announce that all conditions precedent have been satisfied to facilitate a third drawdown of $10 million (the "Third Drawdown") from the previously announced $49 million secured term facility (the "Facility") provided in December 2015 by a syndicate of European lenders consisting of four Development Finance Institutions ("DFIs"). Subsequent to this drawdown, $35 million will have been drawn on the Facility. All amounts in this press release are expressed in US dollars unless otherwise indicated.
The purpose of the Facility is to finance investment into equipment, replanting, fertiliser and environmental and social governance ("ESG") expenditures required as part of the rehabilitation of the three palm oil plantations of Feronia's subsidiary Plantations et Huileries du Congo SA's ("PHC"), in the Democratic Republic of the Congo (the "DRC").
The Facility comprises of $16.5 million provided by DEG - Deutsche Investitions- und Entwicklungsgesellschaft mbH ("DEG"), lead arranger and agent for the syndicate, $16.5 million by Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V. ("FMO"), the Dutch development bank, $11 million by the Belgian Investment Company for Developing Countries ("BIO"), the Belgium Government's DFI, and $5 million by the Emerging Africa Infrastructure Fund ("EAIF"), a facility of the Private Infrastructure Development Group (collectively the "Lenders").
Through this financing the DFIs contribute to the development of poor rural areas by supporting the private sector; an important engine for employment and income in developing nations such as the DRC.
Further drawdowns against the remaining $14 million available under the Facility are subject to satisfying further conditions precedent. The amounts advanced under the Facility will be repaid semi-annually over a six year period commencing September 2019. The Facility is subject to covenants, pledges and charges typical of a loan facility of this nature and is secured by way of a first ranking security against the assets of PHC and by way of a pledge of the shares of PHC by a Belgian subsidiary of Feronia.
Feronia selected the Lenders following a tender process which saw considerable interest from a variety of debt providers and DFIs. Approval of the loan by the Lenders followed a comprehensive due diligence process and the further development and extension of the Company's Environmental and Social Action Plan ("ESAP"). The ESAP is the Company's roadmap for implementing environmental and social best practice and improving social infrastructure across its operations and was jointly developed with CDC Group plc, one of Feronia's key shareholders.
In addition to completing the conditions precedent required to access the undrawn component of the Facility, Feronia continues to consider various funding opportunities including both equity and convertible debt instruments. The Company plans to use any funds raised to refinance existing maturing convertible debentures and for general working capital purposes.
Frank Braeken, Chairman of Feronia commented: "I am delighted that we are making the third drawdown on the debt facility provided by our DFI lenders.
"Drawdowns on the DFI debt facility are enabling us to rebuild PHC into a sustainable business fit for the 21st century. DFI involvement brings with it scrutiny and additional requirements which we believe are hugely positive for all stakeholders as we work towards becoming a model for transparency and sustainability both in the DRC and in the palm oil sector."
About Feronia Inc.
- Feronia is an agribusiness operating in the Democratic Republic of the Congo (DRC).
- At the heart of Feronia lies a long established palm oil business, Plantations et Huileries du Congo (PHC), which has three remotely located plantations; Lokutu, Yaligimba and Boteka.
- When Feronia acquired its palm oil business from Unilever in 2009, it had suffered from years of underinvestment and considerable disruption caused by conflict in the DRC. Our initial focus has been on rebuilding the business and resuming production to secure its future and the livelihoods of the thousands of people it employs.
- Feronia's plantations produce crude palm oil (CPO) and palm kernel oil (PKO). CPO is part of the staple and traditional diet of the Congolese and, with our products sold locally in the DRC, we are well placed to help decrease reliance on imports and increase food security and quality.
- Feronia prides itself on being the guardian of our 106 year-old palm oil business and its employees, communities, and environment. We have a long term commitment to improve the living and working environment of our employees and their communities and are committed to sustainable agriculture, environmental protection and community inclusion. Feronia has in place Environmental and Social Management which is focused on implementing environmental and social best practice and improving social infrastructure.
- Feronia is working towards certification by the Roundtable for Sustainable Palm Oil (RSPO) and is implementing IFC/World Bank standards for environmental and social sustainability. Our oil palm replanting programme is brownfield in nature - replacing old palms with new - and it has no reliance on deforestation.
- For more information please see www.feronia.com
About DEG
DEG, a subsidiary of KfW, finances investments of private companies in developing and emerging market countries. As one of Europe's largest development finance institutions, it promotes private sector development to contribute to sustainable economic growth and improved living conditions.
About the Belgian Investment Company for Developing Countries (BIO)
BIO (www.bio-invest.be) is a private company whose capital is held by the Belgian state. The mission of BIO is to support a strong private sector in developing and/or emerging countries, to enable them to gain access to growth and sustainable development. BIO invests directly and indirectly in private sector projects and as such makes a structural contribution to the socio-economic growth of those host countries. Its mandate requires strict criteria in terms of geographical targets, financing tools and, above all, impact on development.
About FMO
FMO is the Dutch development bank. FMO has invested in the private sector in developing countries and emerging markets for more than 45 years. Our mission is to empower entrepreneurs to build a better world. We invest in sectors where we believe our contribution can have the highest long-term impact: financial institutions, energy and agribusiness. Alongside partners, we invest in the infrastructure, manufacturing and services sectors. With an investment portfolio of EUR 9.2 billion spanning over 85 countries, FMO is one of the larger bilateral private sector development banks globally. www.fmo.nl
About EAIF
The Emerging Africa Infrastructure Fund (EAIF) lends to private sector companies building, expanding or improving infrastructure in sub-Saharan Africa. The Fund's objective is to facilitate economic development that directly and indirectly contributes to the alleviation of poverty. EAIF is financed by the governments of the UK, The Netherlands, Sweden and Switzerland and by commercial banks. For more on EAIF please see www.eaif.com
Cautionary Notes
Except for statements of historical fact contained herein, the information in this press release constitutes "forward-looking information" within the meaning of Canadian securities law. Such forward-looking information may be identified by words such as "anticipates", "plans", "proposes", "estimates", "intends", "expects", "believes", "may" and "will". There can be no assurance that such statements will prove to be accurate; actual results and future events could differ materially from such statements. Factors that could cause actual results to differ materially include, among others: risks related to foreign operations (including various political, economic and other risks and uncertainties), the interpretation and implementation of the "Loi Portant Principes Fondamentaux Relatifs A L'Agriculture", termination or non-renewal of concession rights or expropriation of property rights, political instability and bureaucracy, limited operating history, lack of profitability, lack of infrastructure in the DRC, high inflation rates, limited availability of debt financing in the DRC, fluctuations in currency exchange rates, competition from other businesses, reliance on various factors (including local labour, importation of machinery and other key items and business relationships), the Company's reliance on one major customer, lower productivity at the Company's plantations and arable farming operations, risks related to the agricultural industry (including adverse weather conditions, shifting weather patterns, and crop failure due to infestations), a shift in commodity trends and demands, vulnerability to fluctuations in the world market, the lack of availability of qualified management personnel and stock market volatility.
Details of the risk factors relating to Feronia and its business are discussed under the heading "Risks and Uncertainties" in Feronia's Management's discussion and Analysis for the year ended December 31, 2016, a copy of which is available on the Company's SEDAR profile at www.sedar.com. Most of these factors are outside the control of the Company. Investors are cautioned not to put undue reliance on forward-looking information. Except as otherwise required by applicable securities statutes or regulation, the Company expressly disclaims any intent or obligation to update publicly forward-looking information, whether as a result of new information, future events or otherwise.
Neither the TSX Venture Exchange nor its regulation services provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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