Equatorial Palm Oil plc Loan of up to US$30.0m for Joint Venture Company (8364I)
September 05 2016 - 1:00AM
UK Regulatory
TIDMPAL
RNS Number : 8364I
Equatorial Palm Oil plc
05 September 2016
5 September 2016
EQUATORIAL PALM OIL plc
("EPO" or the "Company")
Loan of up to US$30.0m for Joint Venture Company
Equatorial Palm Oil plc (AIM: PAL), the AIM listed palm oil
development and production company with operations in Liberia, West
Africa announces today its 50 per cent. owned joint venture
company, Liberian Palm Developments Limited ("LPD"), has entered
into a loan agreement for the loan of up to US$30m with KLK Agro
Plantations Pte Ltd ("KLK Agro"), a wholly owned subsidiary of
Kuala Lumpur Kepong Berhad ("KLK"), for the operations and funding
for LPD (the "Loan").
The Loan will be used to continue with the next phase of growth
of LPD and fund the construction of the new 60 metric tonne ("MT")
palm oil mill to be built on Palm Bay estate.
The key terms of the Loan, which is unsecured, are as
follows:
-- Amount - up to US$30m
-- Term - 2 September 2016 to 25 January 2020 (the "Term")
-- Interest - 3-months USD LIBOR + 5 per cent per annum
-- Repayment - loan principal (together with all accrued
interest) due on expiry of the Term or such earlier date as LPD may
decide
The Loan is in addition and on predominantly the same terms as
the Loan of US$20.5m announced on 27 January 2015, which has now
been fully drawn down and remains outstanding, falling due on 25
January 2020. The Loan can be drawn down by LPD in line with its
operational funding requirements and subject to the consent of the
KLK Agro.
Geoffrey Brown, Executive Director of EPO, commented:
"We are very pleased that LPD has now secured this $30.0m loan
with KLK Agro for the development of our oil palm estates in
Liberia. This funding will drive our operations into production in
2018 and fund the building and commissioning of a new 60MT palm oil
mill at Palm Bay. The recently signed Memorandum of Understanding
with all the communities on Palm Bay estate for oil palm
development gives us great confidence for continued expansion."
Related Party Transaction
KLK (through its wholly owned subsidiary KL-Kepong International
Limited) currently holds ordinary shares in EPO representing
approximately 62.86 per cent. of the issued share capital of the
Company. In addition, KLK Agro also currently holds 50 per cent. of
the issued share capital of LPD and KLK appoints three directors to
the Board of EPO, namely Lee Oi Han, Teh Sar Moh Nee and Yap Miow
Kien. Accordingly, the Loan is classified as related party
transaction under the AIM Rules for Companies. Michael Frayne and
Geoffrey Brown, being the non-related directors of EPO for the
purposes of this transaction, consider, having consulted with the
Company's nominated adviser, Strand Hanson Limited, that the terms
of the Loan are fair and reasonable insofar as the Company's
shareholders are concerned.
For further information, please visit www.epoil.co.uk or
contact:
Equatorial Palm Oil plc +44 (0) 20 7016
Geoffrey Brown (Executive Director) 9885
Strand Hanson Limited (Nominated
Adviser) +44 (0) 20 7409
James Harris / James Bellman 3494
Mirabaud Securities LLP (Broker) +44 (0) 20 7484
Peter Krens 3510
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ("MAR").
- END -
Notes to editors:
Equatorial Palm Oil plc is an AIM listed crude palm oil
developer and producer with palm oil estates in Liberia, West
Africa. The Company was founded in 2005 and is focused on becoming
a global, sustainable producer of high quality palm oil to regional
and international markets.
With a significant land position in Liberia through its
operating subsidiary LPD, the Company is geographically well
positioned to serve the international and regional markets and is
committed to making a positive impact on the communities in which
it operates through investment in local schools, health clinics,
housing and infrastructure.
The Company's largest shareholder and 50:50 joint venture
partner in LPD is KLK. KLK is one of the largest palm oil producers
in the world and the Company will greatly benefit from their many
years of expertise in oil palm development.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IODKMGGLGZMGVZM
(END) Dow Jones Newswires
September 05, 2016 02:00 ET (06:00 GMT)
Equatorial Palm Oil (LSE:PAL)
Historical Stock Chart
From Apr 2024 to May 2024
Equatorial Palm Oil (LSE:PAL)
Historical Stock Chart
From May 2023 to May 2024