Committed To Sustainability

FERONIA ANNOUNCES SECURED CONVERTIBLE DEBENTURE FINANCING OF UP TO US$17.5 MILLION

06-11-2015

TORONTO, ONTARIO – November 5, 2015: Feronia Inc. (“Feronia” or the “Company”) (TSXV: FRN) is pleased to announce that the Board of Directors of Feronia has resolved to issue up to US$17.5 million by private placement (the “Offering”) of secured convertible debentures (the “Debentures”). The terms of the Offering approved by the Board are substantially the same as those of the convertible debenture financing completed by Feronia in June and July of 2015. CDC Group plc ("CDC"), the UK Government’s Development Finance Institution, has expressed its intention to lead the Offering with a minimum US$10 million investment.

It is expected that a first tranche of the Offering will close on or about November 6, 2015. Completion of the Offering is subject to the negotiation and execution of definitive documentation and approval of the TSXV. Feronia shall make a further announcement in the event that the material terms of the Offering change. There is no assurance that the Offering will be completed.

Proceeds from the Offering will be used for working capital purposes and, in particular, to provide expansion capital for the Company’s subsidiaries in the Democratic Republic of the Congo. The proceeds are also anticipated to enable the Company to deliver better environmental and social standards for workers and the local population through improved community engagement and environmental practices, upgraded community facilities, such as greater access to clean drinking water, and better workers' housing and sanitation.

The Canadian dollar equivalent of the principal amount of the Debentures is convertible into common shares of the Company (each, a “Common Share”) at a rate of Cdn.$0.25 per Common Share. If the Company does not complete an Amended Debt Financing (as such term to be defined in the Debentures) prior to December 31, 2015, the conversion price of the Debentures shall be reduced to Cdn.$0.14 per Common Share.

Interest on the Debentures shall be 12% per annum, compounded semi-annually, and shall accrue and be payable upon maturity, unless converted earlier. Upon conversion, the Canadian dollar equivalent of the accrued interest on the Debentures shall, subject to the approval of the TSXV, be convertible into Common Shares at a per share price equal to the greater of Cdn.$0.25 and the Discounted Market Price (as defined in the policies of the TSXV) at the time of conversion. If the Amended Debt Financing is not completed by December 31, 2015, the interest on the Debentures shall convert at a price equal to the greater of Cdn.$0.14 and the Discounted Market Price of the Common Shares at the time of conversion.

The Debentures will mature on January 22, 2016 and shall be converted or repaid. At any time prior to maturity, the Debentures may be converted at the option of the holder. The Debentures shall automatically convert in the event that the Company draws down on an Amended Debt Financing. The Debentures shall be secured by way of a pledge by the Company of the outstanding shares of its wholly-owned Cayman Islands subsidiary, Feronia CI Inc. In the event that the Debentures do not convert into Common Shares prior to the maturity date, there is no assurance that the Company will have sufficient funds to repay the Debentures upon maturity. In such event, unless the maturity date is extended, the holders of the Debentures shall have the right to enforce their security.

Pursuant to Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”), the Offering constitutes a “related party transaction” as CDC is an insider of the Company. The Company will be relying on an exemption from the formal valuation and minority approval requirements. The Offering is subject to the approval of the TSXV and the Debentures and Common Shares issued pursuant to the Offering are subject to a statutory hold period of four-months and one day.

For further information please contact:

Feronia Inc.
Xavier de Carniere, Chief Executive, Feronia Inc.
+44 (0)7468 697 658
xavier.decarniere@feronia.com
www.feronia.com

Paul Dulieu, Investor Relations Manager,Feronia Inc.
44 (0)7554 521421
paul.dulieu@feronia.com
www.feronia.com

CDC Group plc
Rhyddid Carter, Corporate Communications Manager
+44 (0)20 7963 4741 / +44(0) 7824 552 326
rcarter@cdcgroup.com

About Feronia Inc.

  • Feronia is an agribusiness operating in the Democratic Republic of the Congo (DRC).
  • At the heart of Feronia lies a long established palm oil business, Plantations et Huileries du Congo (PHC), which has three remotely located plantations; Lokutu, Yaligimba and Boteka. We also have an arable farming operation which grows and processes rice.
  • When Feronia acquired its palm oil business from Unilever in 2009, it had suffered from years of underinvestment and considerable disruption caused by conflict in the DRC. Our initial focus has been on rebuilding the business and resuming production to secure its future and the livelihoods of the 8,000+ people we directly and indirectly employ.
  • Feronia’s plantations produce crude palm oil (CPO) and palm kernel oil (PKO). CPO is part of the staple and traditional diet of the Congolese and, with our products sold locally in the DRC, we are well placed to help decrease reliance on imports and increase food security and quality.
  • Feronia prides itself on being the guardian of our 104 year-old palm oil business and its employees, communities, and environment. We have a long term commitment to improve the living and working environment of our employees and their communities and are committed to sustainable agriculture, environmental protection and community inclusion. Feronia has in place an Environmental and Social Action Plan which is focused on implementing environmental and social best practice and improving social infrastructure.
  • Feronia is working towards certification by the Roundtable for Sustainable Palm Oil (RSPO) and is implementing IFC/World Bank standards for environmental and social sustainability. Our oil palm replanting programme is brownfield in nature – replacing old palms with new – and it has no reliance on deforestation.
  • Feronia’s management team is comprised of senior agriculturalists with extensive experience in managing both plantations and farming operations in emerging markets.
  • For more information please see www.feronia.com

About CDC

CDC is the UK government-owned development finance institution that uses its own balance sheet to invest in the developing countries of Africa and South Asia. CDC’s mission is to support the building of businesses throughout Africa and South Asia that create jobs and make a lasting difference to people’s lives in some of the world’s poorest places. CDC provides capital in all its forms, including equity, debt, mezzanine and guarantees, and this capital is typically used to fund growth. This capital is provided directly and through fund managers that are aligned with its aims. It has net assets of £3.4bn. www.cdcgroup.com

Cautionary NotesExcept for statements of historical fact contained herein, the information in this press release constitutes “forward-looking information” within the meaning of Canadian securities law. Such forward-looking information may be identified by words such as “anticipates”, “plans”, “proposes”, “estimates”, “intends”, “expects”, “believes”, “may” and “will”. There can be no assurance that such statements will prove to be accurate; actual results and future events could differ materially from such statements. Factors that could cause actual results to differ materially include, among others: risks related to foreign operations (including various political, economic and other risks and uncertainties), the interpretation and implementation of the “Loi Portant Principes Fondamentaux Relatifs A L’Agriculture”, termination or non-renewal of concession rights or expropriation of property rights, political instability and bureaucracy, limited operating history, lack of profitability, lack of infrastructure in the DRC, high inflation rates, limited availability of debt financing in the DRC, fluctuations in currency exchange rates, competition from other businesses, reliance on various factors (including local labour, importation of machinery and other key items and business relationships), the Company’s reliance on one major customer, lower productivity at the Company’s plantations and arable farming operations, risks related to the agricultural industry (including adverse weather conditions, shifting weather patterns, and crop failure due to infestations), a shift in commodity trends and demands, vulnerability to fluctuations in the world market, the lack of availability of qualified management personnel and stock market volatility. Details of the risk factors relating to Feronia and its business are discussed under the heading “Risks and Uncertainties” in Feronia’s Management’s discussion and Analysis for the year ended December 31, 2014, a copy of which is available on the Company’s SEDAR profile at www.sedar.com. Most of these factors are outside the control of the Company. Investors are cautioned not to put undue reliance on forward-looking information. Except as otherwise required by applicable securities statutes or regulation, the Company expressly disclaims any intent or obligation to update publicly forward-looking information, whether as a result of new information, future events or otherwise.

Neither the TSX Venture Exchange nor its regulation services provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.