Black River sells stake in AgriNurture at a loss

Black River Asset Management, the private equity arm of agribusiness giant Cargill, has sold its 26 percent stake in AgriNurture, a Philippines-based distributor and exporter of fruits and vegetables, at a significant loss.

Black River’s Food Fund Holdings vehicle paid $30.5 million for its stake in 2011 and sold its 160 million shares for around $7.1 million to Solveigh Philippines Agri Investments 2, a private company owned by Netherlands-based advisory firm Solveigh.

“Our investment in AgriNurture is fuelled by the fact that we consider the company one of the few listed important agricultural companies. The investment also came at a moment that the stock was, and is, highly undervalued,” Ernst Jan Kruis, Solveigh’s chief executive told Agri Investor.

Philippines stock exchange-listed AgriNurture is owned by Antonio Tiu, a controversial figure who is dogged by tax evasion and corruption charges in the Philippines. In May this year AgriNurture was hit by the resignation of five key executives, following which Tiu said the company would reorganise and divest non-performing units. As recently as January 2014 Black River had acquired a further 15 million shares from Tiu, an indication of how rapidly the business has fallen out of favour with the investor.

“The company has gone through rationalising and is now moving towards a further growth in its core business,” said Kruis. “One of the interesting segments it is in is coconut water which we consider as a very interesting market and in which it is expanding.”

Coconut production is attracting considerable interest as the $40 billion global market for coconut-based products expands rapidly. Earlier this month Agri Investor exclusively reported that the owner of the world’s most productive stevia plantation is developing a 1000 hectare coconut plantation in Cambodia.

Kruis said that Solveigh is “actively working with the company to further develop its potential and we see this investment as a strategic investment with a long term perspective with also the potential for some buy-and-build.”

He added that Philippines Agri Investments 2, which is incorporated as a Dutch private company and backed by private investors, family offices and high net worth individuals, is eyeing more agri investments in the Philippines.