Tanzania : Obtala extends acreage with 195 ha agricultural land for 492,000$

Obtala Ltd, African focused agricultural and forestry company, acquires 195 hectares agricultural land at its Magole Farms operation, currently leased to the 75% owned subsidiary Montara Continental Ltd.

The AIM listed group carries out this as part of an agreement reached via a newly incorporated 49% joint venture for a total cash consideration of 1.1 billion Tanzanian Shilling, about 492,000 USD, it reported on 4 July.

In a separate transaction, the joint venture that operates 1,200 hectares Wami Farms has been renegotiated, increasing thus Montara Continental’s equity and profit share from 70% to 90%.

This occurs few months after Obtala Ltd announced in April it plans to invest 10 million US$ over the next five years in Tanzania under the ’Grow Africa’ initiative.

The newly acquired 195 ha land will be subject to a new lease to a company 90% owned by Montara Continental with the 10% balance owned by Magole Land.

This provides Montara Continental with an effective 94.9% profit share in the agricultural operation near Morogoro, in Tanzania.
Obtala currently operates the Magole Farms under a long-term lease with over 30 years remaining.

As part of the transaction, Montara Continental’s ownership in the processing assets will increase from 80% to 100%.

"Magole Farms and Wami Farms are the pillars of our agriculture project in Tanzania so it is naturally pleasing to secure ownership of our processing assets and increase profit share from our historic and future investment”, Miles Pelham, Chairman of Obtala commented.

The Obtala Group, a vertically integrated trading platform, already operates 1730 hectares in sustainable agriculture in Tanzania and 312,465 hectares in sustainable forestry in Mozambique.