Brazilian company, Laep Investments Limited, Thursday announced that it had reached an agreement with Global Yield Fund Limited (GEM) for a capital injection of about $42.3 million. Laep Investments Ltd is a Brazilian fund responsible for the Parmalat dairy Company, as well located in the country. In the agreement, GEM will fund Laep’s investment and growth plans through an injection of capital, the company reported Thursday in a statement.
GEM will give the capital injection via a subscription of Laep’s shares but even so, Laep would not reveal just how many shares are to be subscribed in the offing. However, Laep did say that it plans to utilize the accrued funding from GEM subscription to aid its development through funding investments and acquisitions.
Should the deal go through, this will be the second time GEM is being approached to for a capital injection by Laep after having been called upon for a similar offer back in June when it gave 126 million Brazilian reals to the company via a subscription of 109.7 million Laep shares. GEM was begun in 1991 and has since grown to a $3.4 billion alternative investment group and is involved in the management of a varying amount of investment vehicles that are targeted on emerging markets all over the globe.
In May 2006, Laep successfully purchased Parmalat Brasil after the collapse of its Italian parent company, Parmalat SpA. At the time of the acquisition, Parmalat was still under restructuring in the domestic Brazilian courts after the failure of its parent in the 2003 crisis.
Laep Ltd's principal activity is to invest in companies engaged in the production and distribution of dairy products. It deals with production, processing, marketing and distribution of dairy products and other food products like: cakes, cookies, tea and juices. The Group also operates with private equity investment, leasing, cattle raising and agricultural and real estate sector. It owns brands like: Parmalat, Gloria, Alimba, Lacesa, Kidlat, Lady, Ibituruna, Pocos de Caldas and Paulista.
Laep Investments Ltd., a private equity fund that controls Parmalat, rose 14 percent on Wednesday, and Parmalat spiked as much as 26 percent. In January, JBS, Brazil’s giant food company had been speculated for a potential Pramalat Brasil acquisition, the company Laep Ltd controls. Laep reiterated that it would be going on an investment spree, mainly expected to target acquisitions in the country and investment opportunities that would help expand the company.
16 July 2010.