Ellah Lakes Focuses on Agro-Allied Resources & Processing Expansion

News in brief:

-Ellah Lakes concluded a public offer seeking to raise ₦235 billion to finance its agribusiness expansion and strategic acquisitions.

-The company’s planned acquisition of Agro-Allied Resources & Processing Nigeria Limited is expected to scale operations and boost revenues significantly.

Ellah Lakes Plc has concluded a public offer to subscribe for up to 18.8 billion ordinary shares, valued at 50 kobo each, priced at ₦12.50 per share, as part of efforts to raise ₦235 billion to support its agribusiness expansion strategy.

Although the capital raise slightly fell short of the ₦117 billion threshold required for broader retail participation, the initiative still marked a major milestone in the company’s long-term growth plan.

Chief Executive Officer of the company, Chuka Mordi, said the offer demonstrated resilience in the equity market, particularly with strong interest from institutional investors despite relatively lower engagement from retail participants.

Alternative Financing Model Limits Debt Exposure

Mordi explained that the company has continued to adopt alternative financing strategies that prioritise equity conversion over conventional debt financing.

According to him, Ellah Lakes has converted shareholder advances and other external financing arrangements into equity, thereby limiting debt exposure on its balance sheet.

He noted that the company’s only significant creditor remains the Central Bank of Nigeria through agricultural financing support valued at less than ₦1 billion, which is expected to be fully repaid within the coming year.

Acquisition to Strengthen Agro-Processing Operations

A central component of Ellah Lakes’ transformation agenda is the planned acquisition of Agro‑Allied Resources & Processing Nigeria Limited.

The acquisition, expected to be completed after regulatory approvals in the first quarter, is projected to significantly expand the company’s operational footprint and strengthen its position in Nigeria’s agro-allied sector.

Mordi said the transaction could increase the company’s revenue by more than 50 times, positioning Ellah Lakes among the leading palm oil producers in the country, alongside major industry players such as Presco Plc and Okomu Oil Palm Company.

Moving Up the Palm Oil Value Chain

Ellah Lakes plans to deepen its presence across the palm oil value chain by expanding beyond crude palm oil production into refined products such as palm kernel oil and related agro-processing outputs.

The company is also exploring opportunities in downstream sectors, including the animal feed industry, as part of a broader strategy to maximise value from its agricultural resources.

Regulatory Approvals and Market Outlook

The company said regulatory engagement is ongoing with authorities, including the Nigerian Exchange Limited and the Securities and Exchange Commission of Nigeria, to finalise approvals for the acquisition.

Mordi emphasised the importance of maintaining transparent communication with shareholders and investors throughout the process.

He added that once completed, the expansion plans could significantly enhance shareholder value while strengthening Nigeria’s agricultural supply chains and creating new opportunities within the agribusiness sector.