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26 Jun 2018 | 10:28

DekelOil agrees option to acquire Pearlside amid push into cashew market

Agricultural group DekelOil said Tuesday it had agreed an option to acquire the remaining 58.5% of shares of investment company Pearlside, which owns cashew processing company Capro for at least €18m.

The acquisition is expected to provide DekelOil exposure to global cashew market, transforming the company into multi-project, multi-commodity business.

Capro, a raw cashew nut business, or RCN, is developing a large-scale 30,000tpa RCN processing project at Tiebissou in Cote d'Ivoire.

First production at Tiebissou is expected in mid-2019.

DekelOil said there was scope to combine the cashew business with its producing palm oil project at Ayenouan, raising the potential to rapidly scale up revenues.

The option to acquire 58.5% of Pearlside can be exercised at any time after the date 31 December 2020 until 6 months after Pearlside issues its annual accounts for the year ending 31 December 2021.

The exercise price would be based on the higher of either 4.5x reported earnings (EBITDA) of Pearlside's last published annual accounts prior to the exercise of the option - on a maximum EBITDA of €7m - or on a valuation of €18m should EBITDA fall below €4m for the 2020 year. 'Based on today's sale prices, processing 10,000tpa of raw cashew nuts in the first full year of operations could generate substantial revenues, which would rise considerably further once the capacity of the plant at Tiebissou has been expanded to 30,000 tpa,' the company said. At 10:28am: (LON:DKL) DekelOil Public Ltd share price was 0p at 7.35p

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