Stanbic IBTC Bank and Standard Bank South Africa jointly acted as mandated lead arrangers to lead a syndicate comprising Standard Bank (Mauritius), First Bank of Nigeria, Zenith Bank, Standard Bank South Africa and Stanbic IBTC Bank 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 is a wholly-owned subsidiary of Flour Mills of Nigeria, 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 7-10 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.
The sugar refinery complex will comprise a 750,000mtpa 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 750,000mtpa with a view to doubling the installed capacity to 1.5 million mtpa over time.
The 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, thereby helping to alleviate poverty in the project areas.
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. Standard Bank South Africa also undertook the role of the lenders' agent.
