Sara Cotton to raise $6.4 mn via equity, debt

Sara Cotton, a Coimbatore-based cotton farm company, has raised $6.4 million (around Rs 29.25 crore) through a mix of equity and debt to fund its overseas expansion plans in Ethiopia. Chennai-based Kalpathi group picked up 58 per cent stake as a strategic investor.

The fund-raising includes debt of $ 4.5 million from Development Bank of Ethiopia, a government-owned bank in Ethiopia, while a combination of overseas and Indian HNIs as well as institutional investors have invested $1.9 million for a 14 per cent stake. Kalpathi group has a 58 per cent stake as a strategic investor.

Sara Cotton CFO Sundhar Rajan said the company would soon commence execution of the project that includes establishing a cotton farm in Ethiopia that will initially measure 25,000 acres.

“Our target is to generate a revenue of $50 million over the next 18-24 months. Over the next 5-7 years, Sara Cotton plans to bring 500,000 acres under cultivation. In the long term, the company also has plans to enter into oil seeds and growing other agro commodities,” he said.