Presco Plc (NGX: PRESCO) has issued an explanatory statement on the 100% equity stake in Ghana Oil Palm Development Company Limited (GOPDC) for US$124,926,600.00.
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The statement released on the Nigerian Exchange Limited was to provide shareholders of the company with all the necessary and material information regarding a “proposed resolution No.18 to be considered at the Annual General Meeting (“AGM”), scheduled to take place at 11:00am on Tuesday, 19 August 2025.
Investogist reported in June 2024 that PRESCO had made an offer to Societe d’investissement pour l’Agriculture Tropicale (Siat SA) to acquire 100% of the 70,580,000 ordinary shares of GOPDC at US$1.77 per share. The acquisition consideration was to be settled in phases, with an initial consideration payment of US$64.96 million, with the balance to be settled at a future time.
Under the resolutions, shareholders will be asked to approve the Proposed Acquisition of SOP and ratify the Acquisition of GOPDC.
FULL STATEMENT
Background
As custodians of the leading integrated agro-industrial company in Nigeria, and in line with its responsibility to seek avenues to consolidate this position and pursue opportunistic inorganic growth to achieve its vision to become the most profitable, sustainable and fully integrated edible oils group in the broader Sub-Saharan Africa region, the Board of Directors (the “Board”) and management team of Presco have focused on identifying the right strategies to drive sustained long-term growth and profitability of your Company.
- In line with this objective, a detailed review of the strategic opportunities available to the Company was explored and the Board reached a decision to Acquire 100% equity stake in GOPDC for USD124,926,600 (One Hundred and twenty four million, Nine hundred and twenty six thousand, six hundred United States dollars only), and proposes to acquire SOP for a consideration of USD46,710,526 (Forty-six million, seven hundred and ten thousand, five hundred and twenty-six United States dollars). More information on the Acquisition and Proposed Acquisition is outlined in section 2 of this document.
- The Board have also proposed the issuance of additional capital by way of a Rights Issue – which will be utilized to support the Company’s strategic initiatives, refinance existing debt and also contribute to the settlement of consideration for the Acquisition of GOPDC and the Proposed Acquisition of SOP.
- Additionally, at the 2024 AGM, shareholders approved the resolution for Business Expansion and the Acquisition of GOPDC. However due to ongoing litigation described in Note (n) to the Notice of the 2025 AGM, the Board has taken the precaution to re-submit all the resolutions originally passed at the 2024 AGM. We therefore respectfully invite shareholders to ratify the Acquisition of GOPDC and consider for approval the Proposed Acquisition of SOP.
The Acquisitions of GOPDC and SOP
Information about the business and operations of GOPDC
GOPDC, incorporated in Ghana on 6 December 1995 is an integrated agro-industrial company specialised in the cultivation of oil palm, extraction of crude palm oil and palm kernel oil, production of specialty oils and fats and distribution of refined oil products and a wholly owned subsidiary of Société d’Investissement pour l’Agriculture Tropicale (“Siat SA”).
GOPDC is a related party to Presco, being a subsidiary of Siat SA, a key shareholder of Presco. GOPDC operates from two estates in Eastern Region of Ghana, the Kwae Estate and Okumaning Estate, with about 21,000 hectares of oil palm plantations of which 13,000 hectares have been developed for up to 6,000 outgrowers. GOPDC has processing facilities that comprise a 60 mt/ha fresh fruit palm oil mill, a 60 mt/day palm kernel mill, a 100 mt/day refinery and fractionation plant and a palm kernel cake pellet plant. Currently, GOPDC has capacity to produce over 35,000 tonnes of palm oil and palm kernel oil per annum and has a storage capacity of 21,000 tonnes. GOPDC commenced packaging of olein vegetable oil under the brand “King’s” following the commissioning of a jerrycan filling plant in 2012.
GOPDC employs about 30,000 workers in peak harvest season and creates direct and indirect income to over 50,000 people.
Information about the business and operations of SOP
SOP, incorporated in Nigeria on 4 July 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 specialty oils and fats and distribution of refined oil products and a wholly owned subsidiary of SIAT SA. SOP is a related party to Presco, being a subsidiary of SIAT SA, a key shareholder in Presco. The company initially spearheaded a 10,000-hectare oil palm plantation in Edo State, Nigeria in 2020.
It later expanded through the Edo State Oil Palm Programme by acquiring Bansley Int’l Ltd, which held 12,500 hectares, bringing its total landholding to 22,500 hectares. 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.
Rationale for the Acquisitions and expected benefits
The Directors of Presco are of the opinion that the Transactions would create significant value for shareholders and relevant stakeholders of the Company for the following reasons amongst others:
- Increased market share and customer base: 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.
- Currency Diversification: Presco currently generates almost all of its revenue in local currency, while GOPDC generates c.41% of its revenue from export sales primarily in US Dollars and Euros. The currency diversification mitigates the impact of adverse exchange rate movements on the Company’s financial performance.
- Economies of Scale: The Transactions will strengthen Presco’s competitive position and drive productivity within the Company through cost savings from streamlining its processes; optimising resource utilisation and positioning more effectively to meet the market demands as a consolidated oil palm business.
- Long-Term Organic Growth and Strategic Land Bank: The Proposed Acquisition presents a compelling opportunity to unlock significant long-term growth for Presco and deliver substantial value to shareholders. By acquiring SOP, Presco can accelerate its expansion from c.43,547 hectares to c.59,760 hectares – an achievement that would typically take 3–5 years organically due to the challenges of land acquisition and capex requirements. SOP’s well-positioned and attractive land bank of over 14,000 hectares provides a strategic advantage, offering a ready platform for scalable and sustainable growth without the delays and uncertainties of securing new land enhancing the maturity profile of Presco’s plantation
- The Acquisition and Proposed Acquisition are expected to drive increase market value of the larger entity listed on the Nigerian Exchange Limited (“NGX”) post the Acquisitions. f. Strategic Group Focus: The Proposed Acquisition and Acquisition will support a broader group wide realignment focused on operational efficiency, specialization, and long-term value creation.
- Access to capital: With the expected increase in market value and increased investor confidence, Presco will have improved access to capital through secondary stock offerings and bond issuances post- the Transactions. The synergy between the entities can potentially increase the overall valuation of Presco, thereby making it more attractive to investors.
- Enhanced Competitiveness through Complementary Strengths: The enlarged Presco Group will benefit from leveraging individual company strengths and exploiting synergies across the supply chain. bolstering its competitive position in both domestic and regional markets.
Financial effects of the Acquisitions
Presco has purchased 100% (One Hundred percent) of the 70,580,000 (Seventy Million, Five Hundred and Eighty Thousand) ordinary shares of GOPDC which translates to a price of approximately USD1.77 for each ordinary share in GOPDC.
The Acquisition consideration was settled in phases, with an initial consideration payment of USD64,961,832 (Sixty-four Million Nine Hundred and Sixty-one Thousand Eight Hundred and Thirty-two United States Dollars) and the balance of $59,964,768 (fifty-nine million, nine hundred and sixty-four thousand, seven hundred and sixty-eight United States dollars) to be settled with the proceeds from the Proposed Rights Issue.
Presco has made an offer to SIAT SA to acquire 100% (One Hundred percent) of the 5,000,000 Five million) ordinary shares of SOP which translates to a price of $9.34 for each ordinary share in SOP. The acquisition consideration for the Transaction Shares is an amount of USD46,710,526 (Forty-six million, seven hundred and ten thousand, five hundred and twenty-six United States dollars).
Following the conclusion of Transaction1, GOPDC has become a subsidiary of Presco; SOP will similarly become a subsidiary of Presco at the conclusion of Transaction2.
Summary of Fairness Opinion
To assess the fairness of the terms of Transaction1, KPMG Professional Services (“KPMG”) was appointed to provide a fairness opinion on the valuations to shareholders of Presco, given the related party nature of Transaction1 & Transaction2. Their opinion was that the consideration is lower than their estimate of the value of GOPDC and as such, is fair to the shareholders of Presco. Similarly, KPMG Professional Services concluded that the Offer is lower than their estimate of the value of SOP and as such is fair to the shareholders of Presco
Voting by SIAT SA
In line with the requirements of the NGX on related party transactions, SIAT SA, the core shareholder of GOPDC and a significant shareholder in Presco, will not vote on the resolutions to approve the Transactions. To this end, the decision to proceed with the Transactions will be made by the minority
shareholders of Presco.
Other Expansion Opportunities
Other potential opportunities are at different stages of exploration in Nigeria and they have not reached the stage of announcement at this time.
Rights Issue
To support the execution of the Company’s strategic initiatives and ensure a strong financial foundation, the Board has proposed raising up to ₦250,000,000,000 through a Rights Issue to existing shareholders.
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
Conclusion and recommendations
The Board of Presco, having considered the terms and conditions of the Transactions, as well as the benefits thereof, recommend that you vote in favour of Resolution No. 18, Resolution No. 12 and all other resolutions which will be proposed at the Annual General Meeting
Contact for more information
For more information on the Transactions, please send all enquiries, questions, and comments to the Company Secretary no later than 48 hours before the AGM to the address below:
Frederick Ichekwai, Esq.
Company Secretary
Presco Plc
Obaretin Estate, Km 22, Benin/Sapele Road
Ikpoba-Okha Local Government Area
Edo State.
Email: Frederick,Ichekwai@siat-group.com
Dated this 14th day of August, 2025
Nnamdi Maduakor is a Writer, Investor and Entrepreneur