FREQUENTLY ASKED QUESTIONS
What is Agrarius?
Agrarius is an agriculture focused investment company offering Shari’ah compliant investment opportunities to investors through its R10 billion JSE listed asset-backed note programme (“Note Programme”), proceeds of which are invested in sustainable and green projects in the agriculture sector value chain. Agrarius is driven and administered by 27four.
Why is Agrarius so exciting?
The Note Programme is the first of its kind for the African continent. By combining its passions for sustainability and agriculture, Agrarius is committed to not only capture financial returns for investors, but also to realise intrinsic returns not replicated in conventional investments. These intrinsic returns include, amongst others, an opportunity for investors to participate in and contribute towards a sustainable future for the agriculture sector which is integral to the global economy.
How do I invest in Agrarius?
In terms of the first issuance under the Note Programme, Agrarius will issue a JSE listed, sustainability linked Sukuk (“Agrarius Sukuk”), to the value of R500 million (“Inaugural Issue”). You can invest in the Agrarius Sukuk with the assistance of a JSE approved stockbroker:
- by subscribing to the Inaugural Issue of the Agrarius Sukuk, subject to minimum subscription amount; or
- following the Inaugural Issue, by purchasing the Agrarius Sukuk on the debt market operated by the JSE.
What does the JSE listing mean?
By listing on the JSE, anyone with a stockbroking account can, with the assistance of a JSE approved stockbroker, invest in the Agrarius Sukuk. The JSE provides a transparent and highly regulated market place through which investors can trade the Agrarius Sukuk.
What is a stockbroker?
Stockbrokers are licensed members of the JSE who trade on behalf of clients as investors cannot invest directly in shares and instruments listed on the JSE. Your bank will also have a dedicated brokerage that can assist. A list of JSE approved stockbrokers can be found by accessing the following link https://www.jse.co.za/find-a-broker-institution
How do I participate in the Inaugural Issue of the Agrarius Sukuk?
Once the listing has been approved, you can participate in the Inaugural Issue of the Agrarius Sukuk with the assistance of your JSE approved stockbroker, by subscribing for the Agrarius Sukuk in terms of a formal application process. Full details of this application process will be communicated in due course.
Are there any conditions to the Inaugural Issue of the Agrarius Sukuk?
Yes. Investors who participate during the Inaugural Issue of the Agrarius Sukuk must subscribe for a minimum subscription amount of R1 million per investor. Furthermore, the Inaugural Issue may potentially be over-subscribed and should this occur, the submission of an application does not guarantee your participation.
Can I buy the Agrarius Sukuk through my stockbroker after the Inaugural Issue?
Yes. Just like other instruments listed on the JSE, you can buy the Agrarius Sukuk with the assistance of your JSE approved stockbroker using your stockbroking account. The Agrarius Sukuk will have a nominal face value of R10 000 per Agrarius Sukuk.
Through your stockbroker you will be able to place your buy and sell orders which will then be executed in the debt market operated by the JSE. The JSE does not trade on your behalf.
I don’t have a stockbroking account, please help.
If you do not already have a stockbroking account and wish to open one, you can contact 27four for assistance by sending an email with your contact details to email@example.com and we will contact you.
What is a Sukuk Note?
A Sukuk Note is a Shari’ah compliant fixed-income instrument that generates periodic profit distributions similar to the coupons of conventional fixed-income instruments like corporate debt instruments or government bonds. The Sukuk Note represents a person’s proportional interest in a pool of assets, and his/her entitlement to the profit being generated from those assets.
Are there any other Sukuks listed on the JSE?
No. The JSE currently has approximately 1 500 listed corporate debt instruments. The Agrarius Sukuk will be the first Sukuk to list on the JSE.
How is a Sukuk different from conventional fixed-income instruments?
The main differences between a Sukuk and conventional fixed-income instruments are as follows:
|Sukuk||Conventional fixed-income instruments|
|Represents ownership interest in a pool of assets||Represents a pure debt obligation of the issuer|
|Funds raised from the issue of Sukuk can only be used for ethical purposes||Funds raised can be used to finance any legal purpose|
|The sale of a Sukuk represents the sale of the holder’s ownership interest in assets||The sale of a bond represents a sale of debt|
What is the benefit of participating during the Inaugural Issue of the Agrarius Sukuk?
There is a possibility that investors who participate during the Inaugural Issue of the Agrarius Sukuk decide to not sell their Agrarius Sukuk later on, resulting in a lack of availability once the Agrarius Sukuk commence trading on the JSE. By not participating during the Inaugural Issue, you therefore may run the risk of there not being any Agrarius Sukuk available for purchase in the market, until such time a further issuance is made by Agrarius.
Will the profit share be treated as income by SARS? How will it be taxed?
Agrarius will procure a tax opinion from a reputable law firm which will be made available to investors. For now, all indications point towards the periodic profit share returns being classified as income. The a forementioned does not constitute formal tax advice and until such time the formal tax opinion has been obtained, investors should consult their own professional tax advisors in this regard.
What if the underlying transactions do not generate sufficient cashflows to pay the profit share or the capital back?
The Agrarius Sukuk provides investors with a diversified portfolio of transactions across the agriculture value chain. Various protections mechanisms are applied at multiple levels to help ensure obligations are met i.e. reserve account, collateral and insurance.
How is the upfront profit participation determined?
This will be determined by the demand for the Agrarius Sukuk in the market. The more investors subscribe for the Agrarius Sukuk, the lower the profit rate will be, as investors will offer lower rates trying to secure an allocation. Everyone will get the same rate.
Are the notes tradeable from a Shari’ah perspective?
Yes. We aim to maintain at least a 30% holding of real assets in the portfolio and this allows investors to freely buy and sell the Agrarius Sukuk on the JSE in accordance with Islamic Laws.
What is the JSE ticker of the Note Programme?
The reserved ticker on the JSE for the Note Programme is “AGRI”. Each instrument to be issued under the Note Programme will therefore bear “AGRI” and a number will be added to denounce the instrument, for example: AGRI.001 for the Inaugural Issue of the Agrarius Sukuk.
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