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Feronia Inc. Closes First Tranche of Strategic Investment From Phatisa's African Agriculture Fund

Jan 15 2013 12:00AM

Marketwire

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TORONTO, ONTARIO -- (Marketwire) -- 01/15/13 -- Feronia Inc. ("Feronia" or the "Company") (TSX VENTURE: FRN) is pleased to announce that it has completed the first tranche (the "First Tranche") of its previously announced financing led by the African Agriculture Fund ("AAF") managed by Phatisa Fund Managers Limited ("Phatisa"). All amounts in this release are expressed in Canadian dollars unless otherwise indicated.

AAF, through its subsidiary Golden Oil Holdings Limited, has acquired 42,028,000 common shares in the First Tranche at a purchase price of $0.12 per share for an aggregate purchase price of $5,043,360. Following completion of the First Tranche, AAF indirectly holds 19.9% of the Company's issued and outstanding common shares. The common shares issued in the First Tranche are subject to a statutory hold period expiring on May 15, 2013.

The Company has appointed two AAF-nominees, Mr. David White and Mr. Anders Einarsson, to the Company's Board of Directors subject to the approval of the TSX Venture Exchange (the "TSXV"). One or both of such nominees will also act on the various committees of the Board. Mr. White is a graduate in Economics and Business, and has extensive experience of Africa, having lived and worked in Nigeria during the early stages of his banking career. He is currently also Chairman of a palm oil company in Sierra Leone and a member of the Investment Committee of AAF. Mr. Einarsson is a graduate in Business and has spent his career in corporate finance and investment activities in emerging markets. Mr. Einarsson is a Deal Partner at Phatisa.

In the second tranche of the financing, the Company is proposing to issue up to 82,500,000 common shares to AAF's subsidiary Golden Oil Holdings Limited and other qualifying investors on a private placement basis at a price of $0.12 per share for gross proceeds of up to $9.9 million. AAF has agreed to purchase 46,009,000 common shares in the second tranche or such number of common shares which will result in AAF indirectly holding at least 30.0% of the issued and outstanding common shares following completion of both tranches. If the second tranche is fully subscribed, the Company will have issued an aggregate of 124,528,000 common shares pursuant to the financing for aggregate gross proceeds of approximately $14.9 million.

Completion of the investment by AAF in the second tranche is subject to various terms and conditions as set out in the subscription agreement entered into between the Company and Golden Oil Holdings Limited, including TSXV approval and shareholder approval. The second tranche is expected to close following a meeting of the Company's shareholders scheduled to take place on February 21, 2013.

The AAF is a leading pan-African agriculture and food private equity fund that is managed by Phatisa, an Africa-based private equity investment management firm. The AAF includes among its limited partner investors a number of European development finance institutions ("DFIs") such as the Agence Francaise de Developpement (AFD), the Spanish Agency for International Development Cooperation (AECID), and Promotion et Participation pour la Cooperation Economique (Proparco); a number of African DFIs such as the African Development Bank (AfDB), the Development Bank of Southern Africa (DBSA), the West African Development Bank (BOAD) and the ECOWAS Bank of Investment and Development (EBID); and other private European and USA investors.

The Company's management and Board of Directors believe that the strategic investment from AAF positions the Company well from a working capital perspective in the short-term, and to access non-dilutive forms of growth funding from other sources in the medium and long-term. "The investment from Phatisa's African Agriculture Fund is a significant milestone for the Company. It is a major endorsement from one of the continent's most sophisticated investors and is expected to have many long-term benefits that greatly exceed the initial cash investment" said Ravi Sood, Executive Chairman of Feronia. "We are pleased to welcome the fund as a significant shareholder and active supporter of management's efforts to achieve our business objectives and create value for shareholders."

About Feronia Inc.

Feronia Inc. is a large-scale commercial farmland and plantation operator in the Democratic Republic of the Congo ("DRC"). The Company uses modern agricultural practices to operate and develop its oil palm plantations and arable farming business division. Feronia believes in the immense agricultural potential of the DRC for high-quality foodstuffs and edible oils given its ideal climate, excellent soil and highly skilled and experienced workforce. Feronia's management team is comprised of senior agriculturalists with extensive experience in managing both plantations and large-scale mechanized farming operations in emerging markets. Feronia is committed to sustainable agriculture, environmental protection and providing support for local communities. For more information please see, www.feronia.com.

Cautionary Notes

Except for statements of historical fact contained herein, the information in this press release constitutes "forward-looking information" within the meaning of Canadian securities law. Such forward-looking information may be identified by words such as "anticipates", "plans", "proposes", "estimates", "intends", "expects", "believes", "may", "will" and include without limitation, statements regarding the completion of the second tranche of the financing, the Company's working capital position, the Company's ability to access non-dilutive funding and the benefits to the Company of the investment by AAF. There can be no assurance that such statements will prove to be accurate; actual results and future events could differ materially from such statements. Factors that could cause actual results to differ materially include, among others, the inability to complete the second tranche of the financing on terms acceptable to the Company or at all, the level of participation from other qualifying investors in the second tranche of the financing, regulatory risks, risks inherent in foreign operations, commodity prices, competition, and investments having no history of operations. Most of these factors are outside the control of the Company. Investors are cautioned not to put undue reliance on forward-looking information. Except as otherwise required by applicable securities statutes or regulation, the Company expressly disclaims any intent or obligation to update publicly forward-looking information, whether as a result of new information, future events or otherwise.

Neither the TSX Venture Exchange nor its regulation services provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.



Contacts:
Feronia Inc.
Ravi Sood
Chairman
(416) 907-2026
Ravi.Sood@feronia.com
www.feronia.com

Feronia Inc.
Bill Dry
CEO
44 (0) 7887 525 046
Bill.Dry@feronia.com
www.feronia.com





Source: Marketwire