US$10 million bills to support tobacco farmers
http://www.theindependent.co.zw/
Thursday, 28 October 2010 18:43
AGRICULTURAL Development Bank of Zimbabwe (Agribank) and FBC Bank Ltd on
Wednesday floated Tobacco Bills worth US$10 million to support tobacco
farmers for the 2010/11 season.
Agribank says the money raised will be channelled towards mobilising
financial support for tobacco famers for the growing, curing and
transportation of the crop to auction floors next year.
Neverseez Capital Ltd and FBC Bank are the financial advisors for the
transactions.
In an interview with businessdigest on Wednesday, Neverseez Capital Ltd CEO
Iyanda Nyanda said there was no closing date for the tobacco paper.
“We are operating at a first come first serve basis and we will close once
the intended target has been achieved,” he said.
Neverseez Capital Ltd is also the financial advisor of the Agro-bills which
were floated this year.
Nyanda said they were expecting a positive response as tobacco had become
the best paying crop whose production had increased significantly this year.
“There are no prescribed assets on the market at the moment for both
insurance and pension funds. We have created an opportunity for them to
enhance and strengthen their positions before the year ends with this
exercise,” Nyanda said.
In a statement on Wednesday Agribanks said: “The referred institutions
hereby invites investors, including, but not limited to pension and
provident funds, insurance companies, life mutual commercial banks and other
interested institutions as well as individuals in Zimbabwe, to subscribe to
bills amounting to US$10 million.”
The bills will be governed by and construed in accordance with the laws of
Zimbabwe. The interests for the bills are negotiated on private placement
basis with a maturity period of 360 days from date of issue. Payments will
be made to investors by the settlements agent by due date of maturity.
“Most of the tobacco farmers are small scale and indigenous who need support
to produce more next year,” added Nyanda.
Tobacco Industry and Marketing Board CEO Andrew Matibiri told businessdigest
that tobacco production in Zimbabwe would increase next year as seed
sufficient to cover 110 000 hectares had been sold while about 15 000
farmers had so far registered to grow the crop.
“The number of registered farmers has increased by 80% from last year. The
pace at which tobacco seed was being bought showed that farmers were geared
to increase production,” he said.
Matibiri said the deadline for registration of growers for marketing tobacco
has been set for October 30.
Last season, 52 000 farmers registered to produce tobacco on 65 000
hectares.
At the close of the auction floors on September 3, more than 120 million kgs
of tobacco had been sold with the contract system contributing the bulk of
the deliveries.
The industry had projected an output of 77 million kg to go under the hammer
but this was later revised twice, first to 93 million kgs and then to 114
million kgs.
This year tobacco sales kicked off in February, earlier than the traditional
month of April, to enable farmers to access cash to pay up debts.