Feronia Inc. Announces Strategic Investment from Phatisa's African Agriculture Fund

Marketwired

TORONTO, ONTARIO--(Marketwire - Dec. 9, 2012) - Feronia Inc. ("Feronia" or the "Company") (TSX VENTURE:FRN) is pleased to announce that it has entered into a share subscription agreement with 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 one of its subsidiaries, has agreed to subscribe for common shares in the capital of the Company in two tranches. In the first tranche, AAF has agreed to purchase 42,028,000 common shares at a purchase price of $0.12 per share for an aggregate purchase price of approximately $5.0 million. Following such investment, AAF will indirectly hold 19.9% of the Company's issued and outstanding common shares.

Following completion of the first tranche and subject to TSX Venture Exchange ("TSXV") approval, the Company will appoint two AAF-nominees, Mr. David White and Mr. Anders Einarsson, to the Company's Board of Directors. 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. Anders is a Deal Partner at Phatisa.

In the second tranche, the Company is proposing to issue up to 82,500,000 common shares to AAF 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 in the second tranche up to 46,009,000 common shares for gross proceeds of up to approximately $5,550,000. 

The completion of the two tranches is subject to various terms and conditions as set out in the subscription agreement including TSXV approval with respect to both tranches and shareholder approval with respect to the second tranche. The first tranche is expected to close in early January 2013 with the second tranche expected to close immediately following a meeting of the Company's shareholders anticipated to take place in late February 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 Française de Développement (AFD), the Spanish Agency for International Development Cooperation (AECID), and Promotion et Participation pour la Coopération Économique (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.

"This strategic investment in Feronia is AAF's second African palm oil investment and we see opportunities to grow this asset profitability, while meeting important development objectives," says Valentine Chitalu, Chairman of Phatisa Group.

The AAF also has an associated Technical Assistance Facility ("TAF") of EUR10 million which provides technical assistance to agri and food-related businesses that receive investment through the AAF, allowing them to create new opportunities for small-holder farmers, farmer business groups and rural communities. The TAF is funded primarily by the European Commission and managed by the International Fund for Agricultural Development (IFAD). It is also co-sponsored by the Italian Development Corporation, United Nations Industrial Development Organisation (UNIDO) and the Alliance for a Green Revolution in Africa (AGRA). The Company's management is optimistic that as a result of AAF's strategic investment, the TAF can be accessed to provide a grant to accelerate the Company's goal of facilitating small-holder farming in the vicinity of its operations.

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 proposed capital expenditure; the Company's plan of operations and comparative advantages; plans regarding sowing rice and replanting oil palms; sales estimates and inventory levels in the fourth quarter of 2011; improvements in harvesting and collection; and positive trends regarding OERs. 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, 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.

Contact:
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

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