Real Good Food sweet on deal with Mauritian investor

BAKING ingredients  and sugar supplier Real Good Food is raising more than £2m to reduce its debt by issuing new shares to shareholder and new strategic partner, Omnicane.

The fund-raising, which accompanies a commerical agreement between the Liverpool company and the Mauritius-based sugar producer, will see Omnicane’s stake grow to 20% of the business.
 
Real Good Food said that it has been talking to Omnicane’s management about how the parties could work together since the Mautitian company took a stake in it earlier this year.

Omnicane is the biggest sugar producer in Mauritius and is a fast growing business also involved in other agricultural, energy, property development and logistics businesses in Mauritius.

It has developed a low-cost model of cane sugar refining combined with electricity co-generation and has stated its strategic intent to develop this integrated model of sugar and energy production worldwide.

Real Good Food said its subsidiary Napier Brown coiuld offer Omnicane  routes to market within the EU where there is demand for competitively priced cane imports.

“RGFC and Omnicane also intend to explore joint ventures not only in added value sugar production but in developing export markets for other RGFC products, particularly on the African continent,” a statement said.

Real Good Food will also be issuing 4.06 million ordinary shares of 2p each  to Omnicane at a price of 60p, a premium of approximately 9.1% to the closing share price on Friday.

This will increase Omnicane’s total holding in RGFC to 13,8 million shares, representing approximately 20%. In addition, a representative of Omnicane will shortly be appointed to the board of RGFC.

Real Good Food said the net proceeds of the Placing, approximately £2.4m, will be used to reduce the group’s borrowings.

Pieter Totte, RGFC executive chairman, said: “I am very pleased with this innovative development, this is an exciting time for the business and we look forward to working with Omnicane on exploring mutually beneficial opportunities.”

Jacques D’Unienville, Omnicane CEO, added: “We have known Napier Brown and RGFC for a long time and are delighted to be now working together. Both businesses can learn from each other – with the impending changes in the sugar market, the timing couldn’t be better.”