Nyaradzo to raise US$20 million for special purpose company Sahwira Agriculture
HARARE, Nyaradzo Life Assurance intends to raise a maximum of US$20 million through the issuance of a combination of Inflation Indexed Notes and Preference Shares during a five (5) year issuance window through its special purpose company Sahwira Agriculture (Pvt) Ltd for financing crop production for the 2020-2021 agricultural season.
Sahwira Agric, is a commodity-linked entity that is focused on primary agriculture in Zimbabwe, backed by Nyaradzo Life Assurance Company as its anchor investor, with management oversight from Nyaradzo Asset Management.
The Private Placement Programmes are of an 8% Inflation Indexed Notes of US$8 million and 5% Participating Preference Shares of US$12 million to raise up to USD 20 million or its equivalent in Zimbabwe Dollars
According to an investment memorandum gleaned by Insurance24, the company’s core activity is large-scale food crop production in various locations across Zimbabwe, with a particular focus on the cereal crops of maize and wheat and the leguminous crops of groundnuts, sugar beans and soya beans.
“Sahwira Agric operates a corporate farming model with centralised management and clustered farm operations across the country. This is a lean, yet efficient and flexible model that enhances the overall operations through scale efficiencies and cost optimization,” Philip Mataranyika, the group’s chairman said.
The investment memorandum said that within the 5-year issuance window of each Programme, the Company will, from time to time, come to the market and issue a tranche of either (or both) instruments until the target maximum for each instrument is reached.
The Inflation Indexed Notes will generally be issued more frequently than the Participating Preference
Shares. The exact timing of the issuance of each tranche will be at the discretion of the Board.
The proceeds from the issuance of the Inflation Indexed Notes will be used to fund working capital requirements of the Company for the forthcoming agricultural season.
From one agricultural season to the next, the specific working capital and capital expenditure requirements will be assessed by the Investment Manager who will then recommend to the Board, the size of the respective tranches of Inflation Indexed Notes and Preference Shares to be issued at any particular point in time.
The Company seeks to generate income and capital preservation for Investors through the profitable operation of large-scale commercial farms in Zimbabwe through a corporate farming model
The Company intends to employ a diversified crop farming model to maximise return on its assets and create investor value. The Company also intends to grow the business steadily and carefully manage the bottom line while reacting timeously to expansion opportunities.
“As Sahwira Agric, we envision progressively scaling our business through leasing of both private and state-owned agricultural land for crop production purposes. We see significant scope in optimised large-scale production in Zimbabwe and it is our intention to firmly position Sahwira Agric as a leading food crop producer with potential to expand along the value-chain in the medium to long term,” Mataranyika said.
He added that an investment in Sahwira Agric is premised on the inherent potential in the vast and yet underutilised crop production capacity that Zimbabwe possesses.
“Sahwira Agric intends to leverage on the available land and water resources coupled with best-in class technical expertise in order to maximise output and generate a real return for its investors.
“It is our conviction, which we can partner with yourselves to not only earn diversified returns from a non-traditional investment but also contribute positively towards the restoration of Zimbabwe’s breadbasket status.”