Ellah Lakes Seeks Funding to Reposition Operation after Acquisition
Diversified agribusiness operator, Ellah Lakes Plc has moved to reposition the company after it was acquired by Telluria Farms in May 2019. Quoted at N4.25 on the Nigerian Exchange, the company has more than N10 billion in total assets as of the end of the financial year ended July 2021 with about N9.5 billion market capitalisation for 2 billion shares outstanding.
Despite signing series of business agreements and contracts that are fundamental to its operation, Ellah Lakes, loss expands in the financial year 2021 amidst ongoing recapitalisation of the balance sheet with an expected debt and equity fundraise to commence after the Annual General Meeting in October.
The company’s financial statement shows a loss of N562.788 million was recorded in 2021, from N308.301 million in 2020. This was due to a lack of revenue as the company moves to reposition.
Ellah Lakes was acquired by new shareholders in 2019 and is in the process of transitioning into a leading agribusiness in West Africa, the management said in a note submitted to the Nigerian Exchange. Prior to the acquisition, the company was an insolvent entity with no revenue.
Commenting on the result, Mr. Chuka Mordi, Chief Executive Officer/Managing Director said “Over the last 12 months, we have focused on laying the foundation for sustainable growth and value-adding company by improving our financial flexibility, expanding our land bank nationally, forming partnerships and recruiting top talent.
“A key achievement in line with our strategic plan was the acquisition of a total of 7,400 hectares of land. Our focus for the coming year is to begin to generate cash flow by diversifying our products to more crops and commodities that can be traded in the medium term and processed to finished goods in the long term.
“We are excited about our trajectory and the value we are unlocking for our shareholders.”
The company recordS year-to-date growth in total assets to N10.08 billion from N5.63 billion, as well as a significant increase in cash and cash equivalents.
Meanwhile, year-to-date, borrowings increased to N2.23 billion from 733.56 million with total liabilities of N2.96 billion. Management hinted that Ellah Lake’s total operating expense of N327.72 million was driven by administrative, personnel expenses and depreciation which reflects the Company’s investment in its operations.
The breakdown of its operating expenses profile shows that administrative expenses accounted for 47.8%, personnel expenses took 51.5% and 0.6% of the total was depreciation charges.
“Ongoing recapitalisation of the balance sheet with an expected debt and equity fundraise to commence after the Annual General Meeting in October Operational”, the company said.
Meanwhile, Ellah Lake said the management has signed a produce offtake agreement with Pure Flour Mills Ltd and Premium Cassava Products Ltd. during the course of the year for the supply of Cassava.
It also provides an update on its landbank o Acquisition of 5,000 hectares of land in Ondo State for the cultivation of Oil Palm, Soya Beans & Cassava.
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“Ongoing discussions for the acquisition of approximately 2,800 hectares of land in Ekiti State which will bring the total size of the land bank nationally to approximately 10,000 hectares”, the company said.
The management noted that Approximately 140 hectares have been cultivated, with additional 300 hectares cleared at the Edo state farm. In Ondo state, an access road is being cleared, which will lead to the land being acquired from the government.
Ellah Lakes said in line with plans to transition into a leading West African agribusiness, the Company signed an MOU with KJM Trading Ltd. Ghana to expand its business in Ghana, and Ellah Lakes Ghana has been incorporated.
It also signed MOU with the Agricultural Fresh Produce Growers and Exporters Association of Nigeria and ALTS Consult to establish strategic partnerships in the agriculture sector.
Profile:
Ellah Lakes is a diversified Agribusiness operator founded in 1980 and listed on the Main Board of the Nigerian Exchange. In 2019, The Company was acquired by new shareholders, and under a new management team has transformed into oil palm production through the acquisition of Telluria Farms in May 2019, as well as its expansion into cassava farming.
The acquisition repositioned the Company’s focus towards the production of Oil palm, Cassava, Maize, Soya beans, and their derivative products. Ellah Lakes currently operates in Nigeria.
Ellah Lakes Seeks Funding to Reposition Operation after Acquisition
