African Industries Group develops its agribusiness in Romania with EUR 49.4 M financing

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African Industries Group (AIG) private holding company, with investments in Europe, the Middle East and West Africa, has secured a 49.4 million euros loan, amount that will be invested to expand the group’s agricultural activities in Romania, by acquiring 13,700 hectares in the south of the country. The syndicated financing was coordinated by Banca Transilvania, as the Principal Mandated Arranger, with OTP Bank Romania as a part of the banking union, both banks being financiers.

The transaction for which the AIG holding, owned, and controlled by brothers Raj and Alok Gupta, signed this syndicated financing, is a reference on the Romanian agribusiness market, given that the loan is to be used to acquire Thames Farming Enterprises (Netherlands). This is the parent company of Agricom Borcea, Tudor 92, Concordia Agro farms and Alisa Farm Management, from Călărași County, with a total area of 13,700 hectares and a storage capacity of almost 40,000 tons.

“The transaction is an important step in our commitment to Romania. We started agricultural operations in 2015, with 2,300 hectares in Teleorman, and following this transaction we are approaching 20,000 hectares. To increase agricultural output and prepare for major and unpredictable weather changes, we will continue to invest in irrigation systems, technology, and new equipment. At the same time, we will adopt agricultural practices for soil sustainability and conservation, in order to reduce the use of various chemicals and crop fuels. Our goal is to invest in farm automation and technology, including through the implementation of specialized know-how. We already have modern micro weather stations, satellite imagery and various methods for accurately monitoring processes on our farms. Through our Agroconcept company we bring the most advanced agricultural equipment of various global top brands, which gives us a unique position in Romania. We are constantly looking for new agrotechnological investment opportunities to make agriculture more efficient, more precise and more robust, and we are looking at investments in areas that contribute to added value in agricultural products”, said Raj Gupta, shareholder of African Industries Group.

Financing agriculture is one of OTP Bank Romania’s strategic directions, this industry representing an important part of our portfolio. We want to support both small and medium-sized farmers and large groups, active in this field. African Industries Group is part of the second category and we are glad that we are able to support them in this project, which is an important step in their local development plans”, said Roxana Hidan, Deputy General Manager of OTP Bank Romania, Business Division.

Banca Transilvania is a traditional financier of Romanian agriculture, bringing a vast expertise through the specialized Agribusiness segment. We are happy to support, through our unionization department, the financing of one of the most important procurement transactions in agribusiness, through its size”, said Cosmin Călin, Executive Director of Large Corporate Clients, Banca Transilvania.

The multidisciplinary team of Deloitte Romania and Reff & Asociații provided consulting services, a detailed due diligence process, assistance in structuring the transaction, as well as the preparation and negotiation of transaction documents. The Dentons international team led the consultancy for the acquisition transaction (governed by English law), as well as for the financing for the acquisition, provided by Banca Transilvania and OTP Bank. The legal advisor for Banca Transilvania was the Țuca Zbârcea & Asociații law firm, while EY was the tax adviser of the transaction.

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