Agriterra to sell Mozambique operations, become cash shell

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Agriterra to sell Mozambique operations, become cash shell

11:50 CAT | 11 Mar 2025

File photo: Agriterra

Agriterra Limited, the AIM-listed African agricultural company, has announced the proposed sale of its entire Mozambique agricultural business to Chepstow Investments Limited, its majority shareholder. The transaction, pending shareholder approval at a General Meeting scheduled for March 31, 2025, will transform Agriterra into an AIM Rule 15 cash shell.

The deal includes the sale of Agriterra’s 100% interest in Agriterra (Mozambique) Limited (AML) and a 1% direct interest in each of its Mozambican subsidiaries. Additionally, Chepstow will take on the AGTA-Moz Debts, which as of February 28, 2025, amounted to significant sums owed by DECA, Compagri, and Mozbife.

In return, Chepstow will release Agriterra from its obligations related to the CIL-AGTA Debt and will cover the disposal costs, estimated at approximately £80,000, settle Agriterra’s outstanding trade creditors of roughly £170,000, and provide a Working Capital Facility.

The Mozambique Agricultural Business, which Agriterra is divesting, has been focused on agricultural investment and sustainable development in Southern Africa. It encompasses grain processing, beef production, and snack manufacturing divisions, aiming to become a leading food provider in the region.

However, the company’s recent financial performance has been challenging. For the year ending March 31, 2024, Agriterra reported an operating loss of US$1.85 million and a net loss after tax of US$3.21 million. The half-year period ending September 30, 2024, saw a slight revenue increase but continued losses and rising finance costs.

The decision to divest comes after significant internal and external challenges, including a financial scandal in Mozambique, outbreaks of disease, natural disasters, and the COVID-19 pandemic, all of which have impacted the business environment and Agriterra’s operations.
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Following the disposal, Agriterra plans to operate as a cash shell, with the Directors intending to seek a reverse takeover transaction. The company will have six months post-disposal to complete an acquisition or re-admit as an investing company, failing which its shares will be suspended from trading on AIM.

Chepstow, holding 50.58% of Agriterra’s shares, has indicated support for the resolutions required to approve the sale and the change of the company’s name to PACSCo Limited. The Directors have recommended shareholders vote in favor of the proposals, which they consider to be in the best interests of shareholders and stakeholders.