United Cacao Ltd SEZC (LON: CHOC) Chief Executive Officer Dennis Melka caught up with DirectorsTalk for an exclusive interview to discuss the new $7.36 million financing and the Sacha Gold importation
Q1: Could you walk me through the new financing the company has done in Peru with the international investors?
A1: Yes, absolutely. We completed that earlier this week, we’re very excited to announce that. It’s a combination equity-linked financing, totalling $7.36 million. The equity was done at a very tight discount to the last trade and the convertible bond has a strike premium which was 20% over the last trade, so approximately 22p per share conversion premium. We’re delighted with both transactions, I think it shows the strength of the interest out there for a company such as ours, which wants to be the global low-cost producer of cacao. Also, it comes at an interesting time in the industry where we’re seeing a contraction from the large producers in Cote d’Ivoire, Ghana and Indonesia so we’re going to be planting as quickly as we can. It’s a great transaction for the company and investor alike.
Q2: You’ve announced the Sacha Gold importation, what does that mean for the company?
A2: We’re quite excited about that. One of the advantages of being in Peru and Ecuador is having access to the world’s best genetic material for cacao so for example, we have a portfolio of about half a dozen different types of cacao that we use, the predominant one being the CCN-51 and this has proven for 3 decades now, it’s the dominant type of cacao produced in Peru and also Ecuador, it originated from Ecuador and it sort of, for lack of a better word, Toyota 4Runner of the industry. It’s disease resistant, high yields, excellent cocoa butter content so that makes up the majority of our planting but we’re always trying to bring in the latest and best varietals that we can identify and we’re quite excited about the Sacha Gold. We identified that in the cocoa region of Ecuador, which is just right across the border from Peru, the state of Loreto, where we’re growing our cacao in our project, and it has some very exciting characteristics; the high yielding and disease-resistance of the CCN-51 but it has fine flavour attributes so it’s actually classed as a fine flavour of bean. So we’re monitoring the early plantings of this very closely and we’re looking to potentially expand its use in our state but I think it shows that we’re innovative, we’re always looking to improve where we can and to use the best genetic materials that are available in the marketplace in Latin America. Again, these are materials, the CCN-51 and the Sacha Gold, which are only now in Ecuador and Peru, they’re not available in Asia, not available in Africa so I think, again, it gives us an advantage by being a Latin producer.
