Presco Plc, a leading agro-industrial company in Nigeria, has successfully issued an N82.89 billion bond, marking a significant achievement in the Nigerian capital market. This landmark transaction, facilitated by Stanbic IBTC Capital Limited as the lead issuing house, represents the largest local currency corporate bond issuance in recent years, signaling investor confidence in Presco’s growth prospects and the agricultural sector’s potential. The seven-year bond, with a 23.75% fixed interest rate, falls under Presco’s broader N150 billion bond issuance program and strategically positions the company for further expansion within the West African region.
The proceeds from this substantial bond issuance will primarily fuel Presco’s acquisition of a 100% equity stake in Ghana Oil Palm Development Company (GOPDC). This acquisition aligns with Presco’s ambitious strategic objectives of significantly increasing its oil palm planted area and solidifying its position as a leading player in the integrated edible oil and fats business across Africa. By incorporating GOPDC into its operations, Presco aims to enhance operational efficiencies, broaden its market reach beyond Nigeria, and bolster its competitive advantage within the palm oil industry. This strategic move is expected to create synergies, optimize resource allocation, and strengthen the company’s overall value chain.
Mr. Reji George, Managing Director/Chief Executive Officer of Presco Plc, expressed his enthusiasm for the successful bond issuance, emphasizing its importance in supporting the company’s growth trajectory. He highlighted the acquisition of GOPDC as a crucial step in achieving Presco’s long-term vision of becoming a dominant force in the African edible oil and fats market. He acknowledged the instrumental role played by Stanbic IBTC Capital and other advisors in facilitating the transaction. The successful completion of this bond issuance not only provides the necessary capital for the GOPDC acquisition but also demonstrates Presco’s commitment to delivering sustainable value to its shareholders.
Oladele Sotubo, Chief Executive of Stanbic IBTC Capital, echoed the significance of this transaction, underscoring its impact on both Presco and the Nigerian agricultural sector. He emphasized Stanbic IBTC Capital’s pride in advising Presco on this landmark bond issuance, portraying it as a testament to their expertise in capital markets and dedication to providing innovative financial solutions. Sotubo highlighted the transaction’s broader implications for the agricultural sector, noting its contribution to funding diversification and sustainable industry expansion. The success of this bond issuance reinforces the potential for attracting significant investments into the agricultural sector, driving growth and development within the broader economy.
Presco’s integrated business model, encompassing oil palm plantations, a palm oil mill, a palm kernel crushing plant, and a vegetable oil refining and fractionation plant, provides a strong foundation for its expansion ambitions. The acquisition of GOPDC further solidifies Presco’s vertical integration strategy, enabling it to control the entire value chain from cultivation to processing and refining. This integrated approach positions Presco to benefit from economies of scale, optimize production processes, and ensure consistent quality control across its operations. The company’s commitment to sustainable practices and responsible resource management further enhances its competitive edge and aligns its business with the growing global demand for ethically produced palm oil.
This strategic expansion into Ghana through the acquisition of GOPDC marks a pivotal moment in Presco’s growth trajectory. By expanding its footprint beyond Nigeria, Presco aims to tap into new markets, diversify its revenue streams, and strengthen its position as a leading regional player in the palm oil industry. The successful bond issuance provides the necessary financial resources to execute this ambitious expansion strategy and positions Presco for sustained growth and profitability in the long term. The company’s commitment to operational excellence, coupled with its strategic investments and robust financial performance, makes it well-positioned to capitalize on the growing demand for palm oil in both domestic and international markets.
