Kervan Gıda Announces 17.5 Million USD Investment in the United States

Kervan Gıda Provides Details on Its New U.S. Investment

Kervan Gıda Sanayi ve Ticaret A.Ş. shared information about its new investment in the United States through the Public Disclosure Platform (KAP). The company announced that a land purchase agreement has been signed for the U.S. warehouse project:

“Our wholly-owned subsidiary, Kervan USA LLC, through its fully owned subsidiary Kervan Properties LLC, signed the land purchase agreement with the seller yesterday. The validity of the agreement is set at 120 days.

The completion of the land sale is conditional upon Kervan Properties LLC securing financing for the warehouse construction within this period. Additionally, the seller must fulfill zoning-related requirements by July 31, 2024.

Once agreements with financial institutions are finalized, the land purchase price is expected to be approximately 8.5 million USD. The land area is around 70,000 m². Preliminary estimates indicate the warehouse construction cost will be approximately 9 million USD, with discussions ongoing with contractors. The total project cost is therefore 17.5 million USD, equivalent to 534,964,850 TRY.

The first phase of the warehouse will cover approximately 8,300 m² of indoor space, with an additional 2,200 m² of indoor space permitted for future expansion. According to the current plan, construction is expected to be completed by May 2025.

External financing options under discussion are expected to have a term of 25 years. Borrowing related to construction costs will be gradually included in the balance sheet based on accrued payments (payments to the construction company will be made according to work progress). Borrowing for the land acquisition will be recorded in the balance sheet on the date the purchase is completed.

The project financing is planned to be 75% external funding and 25% equity.

Kervan USA LLC’s current lease for its warehouse expires in July 2025. With this investment, the company will save on monthly rental costs while effectively paying a similar amount to own its warehouse.