Land leasing company ELANA AgroCredit strikes a BGN 10 mln. debt financing to fund operations related to financial leasing contracts with farmers for farmland purchases.
The company got agreements with Societe Generale Expressbank for one revolving loan of BGN 2 mln. with interest 1-month Sofibor + 2.5%, maturing in April 2017, and a second one, which is investment loan of BGN 10 mln. at 1-month Sofibor + 2.75%, maturing 31 Dec 2017. The agreement includes that the principal balance should never exceed a total of BGN 10 mln.

Proved reliability

ELANA AgroCredit has acquired debt financing from Societe Generale Express bank for the first time in 2014. The loan principal was BGN 4.5 mln. and it was duly repaid in July 2015. Other funding sources for ELANA AgroCredit activity was capital raising which it made twice successfully on the Bulgarian Stock Exchange, and another debt financing from the European Bank for Reconstruction and Development (EBRD).

Approx. BGN 30 mln. invested in farmers

ELANA AgroCredit has already built a leasing portfolio of BGN 29.5 mln. since inception by financing the acquisition of 4100 ha of land. It has also extended BGN 2.5m in working capital financing to farmers and landowners. The company has served 250 clients with a target of 300 clients by end of 2016.

Stocks 1-year performance on the Bulgarian Stock Exchange

Business model

ELANA Agrocredit’s business model is extending funds to farmers to acquire land with the latter as a collateral until the end of the leasing contract. Leasing contracts are up to 10 years old and on average they are 5-7 years old with an average interest of 9.5%. New leasing portfolio from March 2016 on are with an 8.5% fixed interest rate.
Latest financial results
ELANA Agrocredit distributes 90% of profits. In 2015, the company booked BGN 1.8 mln. in revenues and BGN 1.034 mln. in net income. Accordingly, it is expected to distribute BGN 0.049 dividend per share, yielding 4.4% at current market quotes.

More from ELANA AgroCredit