Evolva Holding SA (SIX:EVE) has secured equity financing of up to CHF30m. This is a fully flexible arrangement with relatively good terms, which if drawn down in full would give the company about one year’s worth of cash. As an interim arrangement this allows headroom to increase considerably and should help management’s negotiating position with its partner, Cargill, as details of the stevia JV are yet to be agreed. Our valuation of CHF0.87/share remains unchanged.
All eyes on stevia
As indicated by management with the trading update in January, the production of EverSweet is likely to involve a retrofit of the Cargill facility in Blair, Nebraska. The relatively small retrofit should ensure EverSweet retains its first-mover advantage ahead of DSM’s launch of a stevia sweetener in late 2018, and there would be a subsequent move to a new Evolva/Cargill facility. Both the retrofit and the new facility are subject to Evolva exercising its option to enter into a JV with Cargill. Talks have been ongoing for over a year now, and the risk remains that the two parties cannot reach an agreement that Evolva deems to be value-creating for its shareholders. Management still expects an agreement to be signed in the spring.
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