Land Bank buys AFGRI's lending book
According to Business Report, the Land and Agricultural Development Bank of South Africa (Land Bank) and AFGRI Limited announced the recent acquisition by the Land Bank of the farmer lending book belonging to GroCapital Financial Services Proprietary Limited (GroCapital), a wholly-owned subsidiary of AFGRI Operations Limited (AFGRI), in a transaction that became effective on 1 December 2011.
The Land Bank will now own and fund the acquired farmer lending book, while GroCapital will continue to perform the administration functions and maintain the client relations with its farming clients. GroCapital will also continue to originate new farming debt in its own name, but will offer the new farming debt (estimated at approximately R5.1 billion) for sale to the Land Bank on an ongoing basis for at least the next five years, at which time the parties will review the terms of their service level agreement.
"We are very excited by the opportunities that this transaction offers the Land Bank," Land Bank CEO Phakamani Hadebe Business Report. "It is through transactions of this nature that the Land Bank is able to widen the scope of its financing interventions in the emerging market thus increasing its role in ensuring food security," Hadebe said, adding that the bank's ability to raise and offer to the market affordable finance increases the prospects of affordable food prices in South Africa.
Read the full article on www.iol.co.za.
