Nigeria’s Agvest Limited to list US$12.1m cashew nut contracts to raise funds for expansion

NIGERIA – Agvest Limited, Nigerian agricultural value chain player, is seeking to list cashew nut contracts worth N5 billion (US$12.1m) through diversified financial instruments.

The AgGroup is a group of interrelated companies with investments primarily along various crop and livestock value chains of the agricultural sector.

Its investments span across microfinance, fund management, farming, food processing, communication and food retail/distribution.

In readiness for the listing, Lagos Commodities and Futures Exchange (LCFE) has successfully screened the frontline player.

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According to reports by This Day Live, financial instruments worth N1.5 billion (US$3.6m) with cashew nut as the underline assets, would be offered to investing public through commercial papers and short-term exchange traded notes.

The Managing Director, Agvest, Mr Olabode Abikoye, has revealed that proceeds of the offer would enable the company to get both its plantation and factory up and running in West Africa at the first instance.

“Our decision to list cashew nut contracts on the Lagos Commodities and Futures Exchange is to enable private investors enjoy the benefits of quotation. We shall by this approach support the government’s drive to generate foreign exchange.”

Managing Director, Agvest – Mr Olabode Abikoye

Agvest will commence with cashew aggregation on the spot market, issue exchange traded notes in the medium term and add value.

“Our decision to list cashew nut contracts on the Lagos Commodities and Futures Exchange is to enable private investors enjoy the benefits of quotation. We shall by this approach support the government’s drive to generate foreign exchange,” said Mr Olabode.

The company has 210 hectares of land as plantation in Iwo, Oyo State and they are working closely with Oyo State Investment and Public Partnership Agency to activate the plan.

As a listed product, the cashew meets international standard as prescribed by the International Standard Organization, which requires good temperature, moisture level and grade.

Nigeria’s cashew sector is dominated by smallholder farmers numbered at about 25,000 and some commercial plantations.

According to the Ministry of Agriculture, since the 1990s the crop has increased Nigeria’s Gross Domestic Product and is ranked 2nd as non-oil export foreign exchange earner for the country.

In 2018 it generated about US$500 million, providing a livelihood for about 300,000 to 500,000 families mostly youths and women in Nigeria.

The national production capacity of cashew in 2020 was 260,000 metric tonnes on 100,000ha of land. The average yield was 600kg/ha as against the global average of 1.230kg/ha.

The country targets to increase production to 350,000 metric tonnes by 2023, and processing capacity from 15 per cent in 2020 to 35 per cent by 2023.

Meanwhile, FMDQ Securities Exchange Limited has announced the approval for the quotation on its platform of the Nigerian Breweries Plc N1.05 billion (US$2.5m) Series 12, N0.94 billion (US$2.2m) Series 13, and N2.67 billion (US$6.49m) Series 14 Commercial Papers under its N100 billion (US$243m) Commercial Paper Issuance Programme.

The Exchange has highlighted that the listing has brought the total CPs issued by the issuer since the renewal of its N100 billion (US$243m) CP Programme in 2019 to N156.20 billion (US$380m), with a total of N14.76 billion (US$35.9m) currently active.

Corporate institutions in Nigeria continue to successfully tap the debt capital markets to access stable short, medium and long-term finance to fund key activities in their organisations.

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