Ariston narrows debt by $6m

Enacy Mapakame : Business Reporter

LISTED agro concern Ariston Holdings Limited is upbeat of earnings performance in 2017 after it narrowed its debt by $6 million. The group is now seeking to strengthen its balance sheet and enhance profitability. At an extra ordinary general meeting, Ariston’s shareholders approved the conversion of $4 million that was owed to its major shareholder Origin Global into equity.The debt conversion has subsequently increased Origin’s shareholding in the company to 72,13 percent from 67,64 percent.

“We had a certain amount of debt and after this meeting it has effectively been reduced by $6 million, so there will be $4 million of capital we have just converted and $1,5 million accrued in interest rates as at March,” said Ariston chief executive Mr Paul Spear.

“After this transaction, the cost of borrowing has reduced to $10,5 million from $19 million which is a massive improvement,” he said.

As at August, the interest accrued was estimated at $2,5 million. The transaction is expected to enable Ariston to raise cheaper capital for its operations.

After conversion, second largest shareholder, the National Social Security Authority (NSSA)’s shareholding was diluted to 8,76 percent from 10,17 percent.

Meanwhile Mr Spear said the group expects export earnings to remain stable at current levels or improve if the 2016 /17 agriculture season receives adequate rainfall.

In the financial year 2016, Ariston recorded $7 million in export earnings, a figure expected to increase in the next financial year.

In the six months to March 2016, Ariston reported revenue decline of 32 percent to $3,8 million on bad weather.

The group however expects a record harvest for macadamia nuts, one of the group’s export earners.

The group expects 1 500 tonnes of macadamia nuts in the next harvest an increase from 1 340 recorded in the prior harvesting season.

“We expect a modest increase in the quality of nuts,” he said.

The group is currently completing the $340 000 upgrade of its macadamia drying and processing plant which is expected to enhance production and quality of the nuts.

Ariston operates three divisions, Southdowns, Claremont and Kent estates involved in macadamia nuts, tea production, stone fruits, passion fruits, horticultural crops and poultry activities.