TORONTO — Global Food and Ingredients Ltd. (GFI) announced June 15 that it entered a Letter of Intent (LOI) to raise millions for its pet food ingredients division through an investment in equity and debt by 35 Oak Holdings Ltd. The company will dedicate a total of about $12.2 million toward its pet food ingredient business, creating a new subsidiary called Pet Food Co.

Through the LOI, GFI will raise about $11.7 million of inequity and debt held by 35 Oak, as well as commit an additional $500,000 investment in a concurrent private placement.

“We are very pleased to have entered into this letter of intent with 35 Oak in relation to our pet food ingredients division, unlocking significant value for our shareholders and generating substantial capital to strengthen our balance sheet and prepare GFI for the next phase of growth,” said David Hanna, president and chief executive officer, GFI. “GFI will continue to manage all aspects of the pet food business and will consolidate its results as a controlled entity, while realizing on the value created to date since building out the business unit over the past two years.”

The company plans to transfer all its assets and liabilities associated with its pet food ingredients division to create a new wholly owned subsidiary called Pet Food Co. It will also sell a 49.9% stake in Pet Food Co to 35 Oak for about $3.2 million.

GFI’s Pet Food Co will offer a variety of plant-based ingredients to the pet food industry, ranging from ground products to whole lentils, chickpeas, beans and more.

To support Pet Food Co, 35 Oak will provide a two-year loan of up to $10 million, as well as a management services agreement. GFI will retain all decision-making and management control of Pet Food Co following the closing of the transaction, which is anticipated in the second quarter of GFI’s fiscal year ending March 31, 2024.

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