South African agri group Farmsecure has announced that it has sold 10 per cent of its shares to a German development finance institution.
In terms of the deal, DEG (Deutsche Investitions und Entwicklungsgesellschaft mbH), which is a subsidiary of the German promotional bank KfW, will be represented on the board of Farmsecure Holdings.
German Investors seems to be looking south for investment opportunities. Recently German group BayWa concluded a major deal to buy the controlling interest in New Zealand Group Turners & Growers, in what is seen as a gateway to strengthen their marketing in the Far East region.
Farmsecure Holdings has in recent times become an important player in the South African agri sector, particularly in livestock, field crops and horticultural crops. It is a major player in the importation and distribution of agricultural inputs such as fertiliser, crop protection, packaging material and seeds, and in the output chains of grain trading and fruit exports, while it also has a significant stake in well-known South Africa exporter, Colorfruit.
In a statement, Farmsecure noted that DEG had been financing private sector investments in developing and emerging market countries since 1962: 'The German investment and development company first became involved with Farmsecure through the establishment of its ‘AgroAfrica’ programme, which pledged €100m to the development of agriculture in developing countries through a partnership-led loan programme in May 2009.
'Through ‘AgroAfrica’, DEG provided Standard Chartered Bank (SCB) with a guarantee which still forms part of Farmsecure’s facility with SCB providing the working capital for Farmsecure’s primary agricultural activities.'
Jerome Yazbek, CEO of Farmsecure Group, said the group had experienced exceptional growth, both organically and by acquisition, and therefore thought it prudent to further strengthen its balance sheet through this equity injection.
'However, we were not only looking for any investor, but for one who shares our vision,' he added. 'We are delighted that we can now welcome DEG, one of the largest European development finance institutions, not only as a financing partner, but as a shareholder in our group.'
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