Shareholders of Kinetic Growth Fund (KGF) will convene for an extraordinary general meeting later this month to vote on a proposal to guarantee a $5 million loan intended for the significant upgrade of Island Quarries Ltd (IQL), KGF’s primary quarry operation in Mau Village, Namosi. KGF, which is listed on the South Pacific Stock Exchange (SPX), is optimistic about the quarry’s potential and aims to scale operations to meet the increasing demand for high-quality construction materials in Fiji and the surrounding region.
In a letter to shareholders, KGF detailed a range of initiatives undertaken since it took majority ownership of IQL, including addressing regulatory challenges, formulating a comprehensive business strategy, securing lease renewals, gaining local landowner support, and sourcing operational management. These strategic efforts have set the stage for IQL to secure financing for necessary equipment that will enable expansion and elevate production capacity.
KGF has already organized both debt and equity funding to support IQL’s endeavors, reflecting a strong belief in the quarry’s future profitability. Their analysis indicates that the long-term demand for the products developed by IQL is likely to remain robust. Once fully operational, IQL is expected to become a highly profitable venture.
The need for shareholder approval for the loan guarantee stems from SPX regulations, which mandate such a process when the amount exceeds 5% of KGF’s market capitalization. IQL, which opened its doors in 2016, specializes in extracting and supplying rock, gravel, and other stone aggregates pivotal for construction projects. The quarry temporarily halted operations following a tragic landslide in March 2020, which resulted in the loss of three workers. Since then, IQL has focused on site rehabilitation and has successfully resumed operations in 2023 after fulfilling various safety and regulatory commitments.
As KGF, primarily investing in private equity projects, continues its positive trajectory in the quarry business, there is an optimistic outlook for both the company and the local economy. The upgrade of IQL is expected to enhance its operational capabilities, potentially leading to job creation and support for related local businesses—elements that contribute to the broader economic recovery in Fiji.
KGF shares were last noted to be trading at $1.50 on the SPX, reflecting a steady interest from investors in the company’s strategic direction and its commitment to long-term growth.
In summary, KGF is positioning itself for future success through its investment in IQL, showcasing resilience and a concrete plan for recovery and growth in the local economy. This strategic move could have significant positive implications, providing essential materials for forthcoming construction projects and fostering community development in the region.
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