Agriterra (LON:AGTA) (3.4p and 1.8% of JIC) has announced that it has received a net $28m for its 20% interest in the South Omo Block, the sale of which was announced in November. It addition it has lodged a gross sum of $12m with the Government of Ethiopia pending finalisation of any tax related to the sale. Tax will be calculated at 30% of the net gain after attributable past costs incurred in the development of the Block. After final determination of any tax payable the balance will be refunded to Agriterra. The Company will receive a further $10m from Marathon Oil should there be a commercial discovery in the Block
Conclusion: It is good to see the money hit Agriterra's bank account. If everything goes well there could be a further $10m from Marathon, some payback of the $12m lodged with the Government and at some stage they will hopefully receive the c.£11m cash compensation that has been agreed with the Government of South Sudan.
As Andrew Groves, Chief Executive points out this injection of $28m represents approximately 50% of the market capitalisation of Agriterra and will facilitate the growth of its agricultural operations. I would expect the share price to rally from here now some cash has finally arrived.
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Agriterra Ltd is engaged in investing in agricultural and associated civil engineering industries in Africa. The Company has four agricultural divisions namely: Mozbife Limitada (Mozbife), which conducts cattle ranching, feedlot and abattoir operations; Tropical Farms Limited (TFL), which manages the Company’s cocoa sales, trading and farming activities; Desenvolvimento E Comercializacao Agricola Limitada (DECA) and Compagri Limitada (Compagri), which operate maize farming and processing businesses, and Red Bunch Ventures (SL) Limited, which houses Agriterra Ltd’s palm oil operations. In February 2013, it opened its second beef retail unit (the Retail Unit) in Mozambique. In February 2013, the Company expanded its cocoa and farming operations in Sierra Leone, through its wholly owned subsidiary Tropical Farms Ltd. more »
