* IFC to receive interest payments, equity stake
* Armajaro Trading welcomes wider shareholder base
By Nigel Hunt and Sarah McFarlane
LONDON, May 4 The World Bank is investing $55
million in London-based soft commodities company Armajaro
Trading Limited in a move linked to soaring demand for ethically
sourced cocoa, both parties said on Friday.
World Bank member International Finance Corp will receive a
return of 7.5 percent above LIBOR on its investment as well as
warrants to buy 6 percent of the company for a nominal price,
Armajaro Trading Chief Executive Richard Ryan told Reuters.
"I think it is very good for our company that the World Bank
has offered to invest and commit $55 million. It is definitely a
vote of confidence in our business model," Ryan said in an
"They (IFC) very much see us as the leader in cocoa in
sustainability and traceability and so that is something that
meets their objectives, hence the natural attraction."
IFC invests in the private sector to help developing
countries achieve sustainable growth.
In 2002, the institution bought a stake in another major
commodities trader, Olam International, but divested
its holding around five years later following concerns about the
Singapore-based company's forestry strategy in Africa.
Armajaro Trading is more than 70 percent owned by Armajaro
Holdings, which is controlled by co-founders Anthony Ward and
In 2010, a hedge fund run by Armajaro Holdings unit Armajaro
Asset Management caused a stir in the cocoa market when they
made what traders said was one of the biggest bullish bets ever,
taking delivery of almost all available Liffe stocks and helping
drive the spot contract to a 32-year high.
Armajaro Trading has focussed on sustainably sourcing its
supplies of cocoa to meet demand from leading chocolate makers.
Confectionery company Mars has committed that its entire
cocoa supply will be certified as sustainably produced by 2020
and others manufacturers have followed their lead.
"IFC's investment represents a unique opportunity to partner
with a global business leader that is active in improving the
livelihood of its emerging-market farming communities and
developing traceable and sustainable supply chains," IFC
Agribusiness Director Vipul Prakash said in a statement.
Ryan said his company would act as a conduit to help IFC
reach more farmers.
"We reach 500,000 farmers around the world and with the IFC
money we will be able to increase that quite a bit," he said.
Ryan said the company has no current need for additional
capital and no plans for an initial public offering.
"There are no plans (for an IPO) but we do see it as very
encouraging that the shareholder base has widened. There is a
lot of benefit that comes from that in terms of openness and how
you are perceived," he said.
Armajaro has operations in over 20 countries and a presence
in the world's key cocoa and coffee producing countries
including Brazil, Colombia, Ecuador, Ghana, Kenya, Indonesia,
Nigeria, Tanzania, and Vietnam.