Johannesburg - Grocap, a subsidiary of Afgri Operations , is
to dispose of its farmer lending book to the Land and Agricultural Development
Bank of South Africa.
Afgri Operations is a subsidiary of JSE-listed agricultural
services group Afgri [JSE:AFR].
The latter said on Tuesday that the transaction would
improve its financial position and gearing as well as increase its access to
funding, allowing the group to pursue other profitable opportunities with the
capital realised from the sale of the farmer lending book.
"Afgri and Grocap have strong and established
relationships with farmer clients that they want to retain and grow, and wish
to continue offering financial services, at the current standard of service, to
new and existing farmer clients alongside their other products and service
offerings; and Grocap has the capacity and infrastructure to act as an agent of
the Land Bank in respect of the administration functions relating to the farmer
lending book," the group explained.
Grocap will continue to originate farming debt in its own
name but will, from time to time, offer to sell to the Land Bank such farming
debt as meets Land Bank's eligibility criteria, and will also administer the
farmer lending book on behalf of the Land Bank.