Stanbic IBTC Bank Plc and Standard Bank of South Africa Limited has jointly acted as a lead arranger for a syndicated $143.3 million facility to Golden Sugar Company Limited
Both banks led a syndicated facility that comprise of First Bank of Nigeria Plc, and Zenith Bank Plc,
Specifically, the Standard Bank of South Africa and Stanbic IBTC are to raise debt financing required by the Company. The debt raised also included a US$13.3 million Commercial Agricultural Credit Scheme (CACS) facility to partly finance the development of the sugar farm and a Naira Commercial Bank Standby Facility to hedge against foreign exchange risk.
Golden Sugar Company Limited is a wholly owned subsidiary of Flour Mills of Nigeria Plc, one of Nigeria’s largest industrial conglomerates, and was established for the purpose of developing an integrated sugar project, which in addition to the construction and development of the sugar refinery complex in Lagos, will also include, over the next 7 to 10 years, backward integration through growing and cultivation of sugarcane, investment in milling and processing of sugarcane into raw sugar, which will ultimately be refined by the sugar refinery.
Golden Sugar signed a US$143.3 million, 5-year syndicated Multi-Currency Medium Term Facility to finance the construction of a state-of-the-art sugar refinery complex in Lagos State, Nigeria. The sugar refinery complex will comprise a 750,000 mtpa sugar refinery plant, a 65,000 tonne-capacity storage facility and a 12MW gas fueled power plant. The refinery plant will be built on a modular basis with an initial installed capacity of 750,000 mtpa with a view to doubling the installed capacity to 1.5 million mtpa over time.
According to a statement from IBTC, “this project is in line with the Federal Government of Nigeria’s target of achieving 70% self-sufficiency in locally producing raw sugar in the near interim. The phasing and scale of the project has been designed as an import substitution initiative to fast track the development of local sugar production on a sustainable basis, while simultaneously meeting any shortfalls in local sugar supply by refining and adding value to imported raw sugar when necessary.
“As this will be the largest single investment in sugar production in Nigeria to date, the Project is expected to provide direct economic stimulation, employment, technology transfer. development of human resources and supporting industries.
Stanbic IBTC Bank in its additional capacity as Structuring Bank on the transaction also undertook the roles of Financial Modeling Bank, Documentation Bank and Security Trustee. The Standard Bank of South Africa also undertook the role of the Lenders’ Agent.”