Mo Dewji plans Sh9.2 trillion grains production investment via SPAC
What you need to know:
- He said he aimed to structure the venture, for which he has yet to secure land, as a special purpose acquisition company (SPAC) and would himself put up $400 million as 10% to 20% of total funding.
Businessman Mohammed Dewji, has said he plans to float an agriculture company worth up to Sh9.2 trillion ($4 billion) in either New York or London next year, with money raised mainly from development banks, Reuters reports.
Russia's military operations Ukraine in February sent global grain and fertiliser prices to the roof, though they have retreated in recent weeks. And as result Inflation has subsequently risen in many African countries and beyond.
Dewji, 47, whose family conglomerate MeTL Group employs thousands, said the new company will produce grains and edible oils in Tanzania, Mozambique, Zambia and the Central African Republic.
"This is a fantastic way to bring food security... with the potential to feed ourselves and feed the world," he told Reuters in an interview in London on Thursday.
He said he aimed to structure the venture, for which he has yet to secure land, as a special purpose acquisition company (SPAC) and would himself put up $400 million as 10% to 20% of total funding.
A roadshow to raise the remaining funds is planned in the first quarter of 2023, Dewji said, adding that he was open to other forms of fundraising.
SPACs are shell corporations that list on stock exchanges to merge with an existing company to take it public without going through a conventional IPO process. This year, appetite has waned for the vehicles.
Dewji predicted the new company, which might diversify into soy bean and sugar plantations, could net investors a five- to 10-time return over a decade, but would require "patient, impact, long-term capital."
MeTL, which is unlisted and operates in a range of sectors also including textiles, logistics and insurance, plans to invest $250 million in the next two to three years, Dewji said, about 40 of the money will come from bank loans.
That would include adding four factories around Tanzania to an existing soft drinks factory to compete with Coca-Cola and Pepsi and raising production of sisal, from 12,000 to 15,000 tons this year.
He said MeTL's current annual revenues topped $2 billion and would rise this year due to high commodity prices. He, however did not give profit figures.
