KATHMANDU, DEC 27. 2012
Under its strategic agenda to support agribusiness in Nepal, the International Finance Corporation (IFC) — a lending window of the World Bank Group — is close to making a deal for equity investment in a domestic company, Probiotech Industries.
International Finance Corporation has principally agreed to buy a stake in Probiotech — a sister company of Nimbus Group — and in a couple of weeks will sign a mandate agreement, according to sources at the corporation that has already bought shares worth Rs 30 million of Rural Microfinance Development Corporation (RMDC) at a premium rate of Rs 180 per share making it a total investment of Rs 54 million.
After RMDC, International Finance Corporation has been interested in buying equity of Probiotech as it is keen to increase its investment in Nepal.
Though both Nimbus and Green Invest — financial consultant of Nimbus — could not be contacted, IFC sources said that Probiotech Industries has a high growth prospect and the agreement with the international lender will provide the company financial access to expand its operations.
Earlier, International Finance Corporation had helped small poultry farmers to increase their productivity through better farm management practices. It had supported Avinash Hatchery and Probiotech Industries to strengthen the technical skills of 3,000 poultry farmers, directly impacting 40 per cent of the industry under its SouthAsia Enterprise Development Facility.
“The poultry industry of the country contributes around three per cent to the gross domestic product (GDP) with a total investment of $334.26 million,” the Sustainable Energy Financing
report of IFC on Nepal’s industry stated, adding that the industry’s performance suffers from low productivity despite its contribution to the national economy.
“Probiotech Industries is the leading feed industry and seeing its high growth prospects, the international lender has been interested in supporting it,” according to IFC that is finalising its stake, amount of capital it will pump in, and time bound exit policy in the agreement.
There are various modalities of exit policies, which the IFC is considering, and will be finalised in the agreement that will also have broad terms and conditions.
After the agreement, the due diligence of Probiotech will finalise the equity per cent and capital the IFC will pump in, the sources claimed, adding that IFC might pump in around $200,000 but it will be finalised only after due diligence that will start from mid-January, if everything goes as planned.
According to International Finance Corporation norms, it cannot invest more than 25 per cent equity in a company.
The lending arm of the World Bank Group has been engaged with private sector players, multilaterals, government, and other stakeholders to implement an integrated development agenda in Nepal. Besides working on a payment reform project, an advisory team is making important progress by building partnerships between the government and private sector through the Nepal Business Forum.
International Finance Corporation is already investing in the country with a committed portfolio of $25 million that includes projects across various sectors like power, air transport, banking, microfinance, and trade finance lines.
Source: THT
Under its strategic agenda to support agribusiness in Nepal, the International Finance Corporation (IFC) — a lending window of the World Bank Group — is close to making a deal for equity investment in a domestic company, Probiotech Industries.
International Finance Corporation has principally agreed to buy a stake in Probiotech — a sister company of Nimbus Group — and in a couple of weeks will sign a mandate agreement, according to sources at the corporation that has already bought shares worth Rs 30 million of Rural Microfinance Development Corporation (RMDC) at a premium rate of Rs 180 per share making it a total investment of Rs 54 million.
After RMDC, International Finance Corporation has been interested in buying equity of Probiotech as it is keen to increase its investment in Nepal.
Though both Nimbus and Green Invest — financial consultant of Nimbus — could not be contacted, IFC sources said that Probiotech Industries has a high growth prospect and the agreement with the international lender will provide the company financial access to expand its operations.
Earlier, International Finance Corporation had helped small poultry farmers to increase their productivity through better farm management practices. It had supported Avinash Hatchery and Probiotech Industries to strengthen the technical skills of 3,000 poultry farmers, directly impacting 40 per cent of the industry under its SouthAsia Enterprise Development Facility.
“The poultry industry of the country contributes around three per cent to the gross domestic product (GDP) with a total investment of $334.26 million,” the Sustainable Energy Financing
report of IFC on Nepal’s industry stated, adding that the industry’s performance suffers from low productivity despite its contribution to the national economy.
“Probiotech Industries is the leading feed industry and seeing its high growth prospects, the international lender has been interested in supporting it,” according to IFC that is finalising its stake, amount of capital it will pump in, and time bound exit policy in the agreement.
There are various modalities of exit policies, which the IFC is considering, and will be finalised in the agreement that will also have broad terms and conditions.
After the agreement, the due diligence of Probiotech will finalise the equity per cent and capital the IFC will pump in, the sources claimed, adding that IFC might pump in around $200,000 but it will be finalised only after due diligence that will start from mid-January, if everything goes as planned.
According to International Finance Corporation norms, it cannot invest more than 25 per cent equity in a company.
The lending arm of the World Bank Group has been engaged with private sector players, multilaterals, government, and other stakeholders to implement an integrated development agenda in Nepal. Besides working on a payment reform project, an advisory team is making important progress by building partnerships between the government and private sector through the Nepal Business Forum.
International Finance Corporation is already investing in the country with a committed portfolio of $25 million that includes projects across various sectors like power, air transport, banking, microfinance, and trade finance lines.
Source: THT
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