A South African group will enter the shareholding of the citrus company San Miguel.
Juan Manuel Compte
Published on April 09, 2024, in Cronista Comercial
It is the African Pioneer Group (APG). Entrepreneur Stephen Dondolo's holding company is already a partner in his country and will now put $13 million into the subscription of new shares this week.
The African Pioneer Group (APG), from South Africa, will enter the capital of San Miguel.
The holding company, which is already a partner of the citrus company in its country, will invest $15 million in the new share issuance of the Argentine company.
Thus, San Miguel has secured $57 million in the placement, as $44 million will be contributed by its current owners, the Miguens-Bemberg and Otero Monsegur families.
Founded in 1990 by entrepreneur Stephen Dondolo, APG has interests in beverages - it is a Coca-Cola bottler -, gambling, energy - downstream and renewable generation -, fishing, and agricultural investments.
In 2025, it put $13 million of the $22 million required for the plant that San Miguel is building in South Africa and which will open next month. It will add 100,000 tons to the annual lemon processing capacity of the Tucumán (260,000), to which another 100,000 from the factory that the Argentine group is building in Paysandú, Uruguay, will be added. The latter, a $31 million project that will also be inaugurated on May 8.
San Miguel, the main lemon producer and marketer in the southern hemisphere, will consolidate itself as the largest industrial lemon processor on the planet, with a 20% share of global grinding.
"The APG, which has 27.5% of our South African subsidiary, wanted to expand the partnership not only in its country but as part of our global business. That's why it joined the follow-on that we have underway," says Pablo Plá, CEO of San Miguel Global.
The citrus company, which will turn 70 in 2024, has been open since yesterday and until Tuesday (April 16) a capital increase of up to 500 million new shares, to a total of 955.3 million shares. In case of oversubscription, the issue can be expanded up to 1098.6 million shares.
The new shares were issued in a range of $700 to $1100 per share.
The $44 million to be injected by the Otero Monsegur and Bemberg families will actually be the conversion into shares of a syndicated loan from last year, with which San Miguel undertook its projects, which, in addition to the new factories abroad, include additional investments in the historic plant in Famailla, Tucuman.
Pla projects that there will be strong market subscription, so he still cannot specify the final share that the current control group and the APG, its new African partner, will have.
Two years ago, San Miguel made a strategic turnaround: it exited fresh fruit, its historical core, to focus on the industrial market, with higher added value and less volatile than commodities. It sold that operation, which included assets in Peru and South Africa, to the Spanish group Citri & Co., negotiated long-term supply contracts, and embarked on its new plants in South Africa and Uruguay. Meanwhile, just as it found Dondolo as its partner for South Africa, it financed the investment in Paysandú with a loan from the Banco del República Oriental del Uruguay (BROU).
In addition, during 2023, it renewed ONs in the local market for the equivalent of $80 million and obtained a loan from Rabobank, for $27 million.
"It was a portfolio strategy redefinition. Like when Ford stopped making cars to concentrate on pickups and SUVs," compares Pla.
The fruits are starting to be seen now, he assures. In 2023, he emphasizes, San Miguel went from a negative EBITDA of $24 million in 2022 to $4 million positive (without considering restructuring costs, he clarifies). "In the medium term, we will return to the company's historical profitability: $40/50 million in annual EBITDA. Only now, it will be based on the new business model, no longer based on fresh fruit, which had a gross margin negative of 28%, but on industrial products, which have a positive margin of 23%, he explains.
