Nigerian-based Crude Palm Oil (CPO) producer Presco Plc has announced its readiness to acquire Saro Oil Palm SOP for $46.7 million, as part of efforts to diversify the company’s earnings.
Presco board, in a disclosure on the Nigerian Exchange Limited (NGX), also proposed raising N250 billion through a Rights Issue to existing shareholders.
The company stated that the proceeds from the Rights Issue will be deployed towards the refinancing of existing debt obligations, settlement of the outstanding consideration for the 100% acquisition of GOPDC, settlement of the consideration for the Proposed Acquisition of SOP, and creation of a financial buffer to support business expansion
“The Transactions will position Presco as a large African conglomerate with an expanded customer base and increased market share within Africa. Presco’s plantation size is expected to increase by 37% from c.43,547 hectares to c.59,760 hectares, further solidifying its position as a leading oil palm producer in Africa,” Presco stated.
SOP, incorporated in Nigeria on July 4, 2019, is an integrated agro-industrial company specialised in the cultivation of oil palm, extraction of crude palm oil and palm kernel oil, production of speciality oils and fats and distribution of refined oil products and a wholly owned subsidiary of SIAT SA.
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Saro Oil Palm is a related party to Presco, being a subsidiary of SIAT SA, a key shareholder in Presco.
As of January 2025, the company had 5,000 hectares planted and is targeting a total of 8,000 hectares by the end of 2025.
The cultivation of Fresh Fruit Bunches is expected to commence in 2026, with a production target of c.28,000 metric tonnes. Additionally, as part of its strategic initiatives, the company plans to expand into palm oil milling by installing two milling units, with processing capacities of up to 60 tonnes and 30 tonnes of FFB per hour, respectively.
In 2024, Presco acquired a 100% equity stake in Ghana Oil Palm Development Company (GOPDC) for $124.92 million.
GOPDC had an operating profit of 530 million Ghana Cedis ($49.5m) at the end of 2024, while SOP is not forecast to be profitable until 2027.
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