Land and Agricultural Development Bank of South Africa (Land Bank) has acquired the corporate lending book of GroCapital, financial subsidiary of South African agricultural group Afgri; according to the company, this is in line with the bank’s target of owning 35 percent market share of South Africa’s total agri-debt market.
At a media briefing in Pretoria on Wendesday, Land Bank’s Chief Financial Officer, Mr Lebohang Serithi said Afgri would manage the farmer and corporate debtors’ books on behalf of the Bank for a fee of 1.25 percent and 0.5 percent respectively.
According to the terms of the transaction, Land Bank will own and fund existing loans, while GroCapital would handle administrative functions and maintain client relations.
Furthermore, GroCapital will create new corporate debt in its own name, but would be sold to Land Bank for a minimum of five years.
“Land Bank was able to source money that was competitively priced, and with Afgri having advanced agricultural technology and business management. This transaction will not only benefit both companies, but the country as a whole,” said Land Bank CEO Phakamani Hadebe.