NutraCeo Pens a Purchase Agreement w/ AF Bran Holdings


NutraCeo Pens a Purchase Agreement w/ AF Bran Holdings

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NutraCea, a producer and promoter of rice bran oil, stabilized rice bran, and NutraCea derivative products, have penned a Membership Interest Purchase Agreement with Nutra SA, NutraCea’s wholly owned subsidiary, Industria Riograndese De Oleos Vegetais, Nutra SA’s wholly owned subsidiary, and AF Bran Holdings on 12/29/2010.

AF Bran Holdings has gone on to purchase membership units of Nutra SA directly from NutraCea for $4,000,000 and to invest an additional $3,725,000 in Nutra SA to fund company expansion and provide working capital at Irgovel, which operates a Pelotas, Brazil-based rice bran oil production and manufacturing facility.

After the initial closing of this deal, NutraCea will own a 64.4% interest in Nutra SA and AF Bran Holdings will own the remaining 35.6% interest.

In addition, AF Bran Holdings may be required to purchase from Nutra SA or NutraCea, upon the occurrence of certain events, or it may elect to purchase from NutraCea, up to a 49% ownership interest in Nutra SA by December 2012.

NutraCea chairman / CEO W. John Short explained that funds directed to Irgovel will be utilized to expand raw rice bran processing capacity from 70,000 metric tons per year to in excess of 85,000 metric tons per year, and to add new technologies to create value added derivative products from rice bran oil and defatted rice bran.

“We expect the expansion and new technology projects to take about 18 months to come fully on line and to produce an increase in Irgovel’s EBITDA by more than 300% within 36 months,” Short added.

The transactions contemplated by the purchase agreement are subject to closing conditions.

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