The ALCB Fund has invested XOF 2 billion (USD 3.3 million) in La Société de Logistique et d’Exploitation Agricole’s (SOLEA) XOF 4 billion (USD 6.6 million) bond issuance. The bond issuance is for a tenor of eight years (three-year grace) with a coupon of 7.2%. The transaction was fully subscribed with co-investors encompassing four local institutional investors including two asset managers, a bank and an insurance company. The transaction closed on January 26, 2023.
The transaction was approved by the Financial Markets Authority of the West African Monetary Union (AMF-UMOA) under the number "EP /22-06".
SOLEA is a subsidiary of KKO International, a listed French company on Euronext Growth headquartered in Paris, France. SOLEA operates in the agribusiness sector in Cote d’Ivoire, where it develops and manages cocoa trees and cocoa transformation facilities. The company aims to be one of the largest producers of traceable cocoa beans products in the country. The bond proceeds will be used to support the expansion of cocoa processing facilities, working capital financing for factory feedstock and plantations as well as plantation infrastructure capex.
The transaction is the ALCB Fund’s first agriculture investment, and one of only a handful of agriculture bond issuances ever on the African continent. The transaction was also supported by the African Fund for Guarantee and Economic Cooperation (FAGACE),a local guarantor that provided an 80% guarantee to provide comfort to local investors.
Karl von Klitzing, Chairman of the ALCB Fund Board of Directors, said: “The ALCB Fund is delighted to be part of this milestone transaction in Cote d’Ivoire and be an anchor investor. Supporting a business like SOLEA aligns closely to the mandate of the Fund, which is to channel domestic capital to developmental sectors; including responsible agriculture and agri-processing.”
Remy Allemane, Chairman and founder of SOLEA, the issuer said: “SOLEA acknowledges ALCB’s essential role in the successful completion of this important transaction. We are committed to improving the livelihoods of the communities we operate in. The proceeds from this transaction will continue to benefit low-income households and MSMEs across the cocoa value chain that we participate in.”
The ALCB Fund was founded by KFW in 2012 on behalf of the German Ministry for Economic Cooperation and Development (BMZ). The Fund’s mission is to support the development of African capital markets by promoting primary corporate bond issuances in local currency. This is achieved by supporting African issuers, investors and intermediaries by acting as an anchor investor and providing technical assistance. To date, the ALCB Fund has invested in over 35 companies across 17 countries. The Fund is rated Baa2 by Moody’s. The ALCB fund is managed by LHGP Asset Management, a subsidiary company of Lion’s Head Global Partners.