South African company Country Bird Holdings ltd, involved in the integrated poultry and stock feed business, has successfully secured a R231 million (USD$25 million) loan from the International Finance Corporation (IFC) to expand its current production plants.
The IFC, a member of the World Bank which funds private-sector companies/projects in developing countries, is set to invest the loan in the form of a 5 year convertible loan with a variable interest rate. Country bird commented on the loan, "The proposed transaction will result in a long-term strategic relationship with the IFC."
The funds from the loan will be used to increase chick production in Zambia and Botswana, expand the production of its feed mill in Zambia and increase its processing capacity of broiler meat. In addition, it will be used to set up soya bean deactivation plants at two of the group’s feed mills.
The expansions will see increases of day-old chick from to 12.8 million up to 14.6 million per annum at its Ramaphatle breeder farm in Botswana, and from 12.4 million to 26.8-million at Chainda farm in Zambia.
Country Bird will also increase the capacity of its Zambian feed mill from 60,000 tons up to 108,000 tons per annum. The chicken-processing capacity at the Mafikeng plant will be increased from from 28.8 million up to 41.4 million per annum.
The IFC will have an option to convert the loan into Country Bird ordinary shares in the first two and a half years at a strike price of R4.90 a share. This is provided its shareholding does not exceed 18% and that the conversion is at a minimum of $5m per tranche.