Legal regime between Group One Financiers, Investors and JV Partners
Market - take off
The basis of the project is that a management entity will be identified that will ideally be in a position to bring a market to the project that would manifest in a take off agreement for crops at a set price.
Insurance
The crop will be insured by an appropriate underwriter that will ideally be able to discount it's cost against the dynamics of the project and the level of management control. The dynamics and management control aspects comprising the following: -
1. Intensive farming - best crop establishment tending and risk management available coupled with satellite technology
2. Diversification of groups between long medium and gradually established long term
3. Dry or dried crops - shelf life for better market release timing
4. Large critical mass - better bargaining power for price
5. Value adding infrastructure - larger margins on sales for enhanced return on investment .
6. Export of crops - hedge against soft currency fluctuations
7. Development of Nguni Livestock for export of hides and organic meat products
Securities
1. The insurance policy and take off agreements will then serve as security for the financing of the crop establishment costs
2. Implements will secure implement financing
3. Infrastructure will secure infrastructure financing
4. The JV partners will be able to negotiate a contract based on one or a combination of the following: -
a. Investment (ideally no less than 26%) secured by Shareholders Agreement giving full management control in the first yea. Management control reduces and exit strategies increase reduces as mileposts and timelines for empowerment are met by the JV partner and the project participants.
5. Profit sharing, whether as stand alone or in conjunction with investment or management fee.
6. Management fee either as stand-alone or in conjunction with investment and profit share.
7. The JV partner may wish to also invest in the value adding infrastructure and share in ancillary markets of other diversified crops.