BEEFMASTER HOLDINGS PROPRIETARY LTD
Status: Approved investmentWhy disclosure?
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Disclaimer
The information as disclosed is indicative and provided on an "as-is/as available" basis for general informational purposes only and should not be construed as financial, legal or investment advice, nor as a commitment or an offer to arrange or provide any financing. The final decision to provide financing is subject to the terms and conditions of FMO in its sole and absolute discretion. When providing links to other sites, FMO bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. The information on proposed investment for high-risk investments is made available in the language relevant to the country or region where the bulk of operations take place. Translations of any information into languages other than English are intended as a convenience for local stakeholders. In case of any discrepancy, the information provided in English will prevail.
Who is our customer
Beefmaster Holdings (Pty) Ltd. (Beefmaster) is one of the largest privately-owned meat production companies in South Africa. The company had humble beginnings when the founder of Beefmaster started a small feedlot with eleven cattle in the 1960’s. The feedlot grew from strength to strength and Beefmaster was officially incorporated in 1986. Today, Beefmaster is one of South Africa’s most complete vertically integrated producers of beef and beef-related products. It is involved in every aspect of the beef supply chain, ranging from feed production, feedlotting, and slaughtering to distribution through local and international wholesale and retail channels. The company remains a family-owned business and the founding family is still involved in the daily operations.
What is our funding objective?
DEGs and FMOs funding is part of a larger funding package comprising term debt, fresh equity and working capital facilities. DEG and FMO are committing senior loan and mezzanine facilities denominated in South African Rand under the Friendship Facility agreement as part of this funding package. The primary objective of the capital and funding raise is to increase capacity utilisation of Beefmaster’s operations. The proceeds will be used to increase cattle numbers in the feedlot, for capital expenditure related to utilization increase in the abattoir, and to restructure existing debt to bring the company’s debt in line with long term requirements.
Why do we fund this investment?
Animal production contributes approximately 41 percent to the country’s agricultural GDP. About 500,000 people are being employed by the industry and 2.1m people are dependent on the livestock industry for their livelihood. Through supporting an industry vital to the South African economy, DEG and FMO will contribute to the further development of South Africa in general, and the red meat industry in particular. The company’s expansion plans are expected to lead to an increase of 411 jobs, with most of those jobs being in the Northern Cape Province. This is one of South Africa’s least developed provinces with official unemployment close to 30 percent. Lastly, the DEG and FMO financing package will catalyse financing from a commercial bank as well as facilitate the entry of a new equity partner.
More investments
| Date | Total FMO financing |
|---|---|
| 12/4/2015 | ZAR 90.00 MLN |
- Region
- Africa
- Country
- South Africa
- Sector
- Agribusiness, Food & Water
- Effective date
- 12/4/2015
- Total FMO financing
- ZAR 35.00 MLN
- Funding
- FMO NV
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Risk categorization on environmental and social impacts, A = high risk, B+ = medium high risk, B = medium risk, C = low risk
Environmental & Social Category
(A, B+, B or C) - B+