Equatorial Palm Oil plc Loan of up to $30.0m & Palm Oil Mill Update (3727T)
12 October 2017 - 5:00PM
UK Regulatory
TIDMPAL
RNS Number : 3727T
Equatorial Palm Oil plc
12 October 2017
12 October 2017
EQUATORIAL PALM OIL plc
("EPO" or the "Company")
Loan of up to $30.0m Secured for Joint Venture Company
Palm Oil Mill Update
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 of up to $30.0m ("Loan Agreement") 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 will be used to continue to develop the operations of
LPD and finalise the construction of the first stage of the new 60
metric tonne ("MT") palm oil mill being built on Palm Bay estate,
as announced in April 2016.
The key terms of the loan are as follows:
-- Amount - up to $30.0m which is unsecured
-- Term - 5 years from the date of the Loan Agreement, being 11 October 2017
-- Interest - 3-months USD LIBOR + 5 per cent per annum
-- Repayment - Loan principal (together with all accrued Interest due) on expiry of the Term
The Loan is in addition to, and on predominantly the same terms
as, the loans of US$20.5m and US$30.0m provided by KLK Agro,
announced on 27 January 2015 and 5 September 2016 respectively (the
"Existing Loans"), save for the date of maturity being 11 October
2022. The Existing Loans, which have now been fully drawn down and
remain outstanding, fall 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.
Palm Oil Mill Update
The construction of the 60 metric tonnes per hour ("mt/hr") palm
oil mill ("POM") at Palm Bay estate is progressing well. As
announced in April 2016, the POM is being constructed in a modular
fashion with two lines of 30mt/hr each, however, the ground
preparation has been completed for a 60mt/hr POM. The first 30mt/hr
POM module is expected to be commissioned and commence full
operation in Q3 2018.
Palm Bay estate is located 24km from the port of Buchanan where
EPO has leased approximately 4.5 acres for a tank farm and export
facility that is in close proximity to the wharf from which it is
intended that vessels will load EPO's produce for onward shipment
to its customers. Preliminary land infill work is due to start at
the port and tenders are being received for the construction of the
tank farm and export facility which will be completed before the
commissioning of the POM.
Geoffrey Brown, Executive Director of EPO, commented:
"This funding from KLK Agro will drive our operations into
production in the latter part of 2018. The commissioning of the
palm oil mill, expected in Q3 2018, will be a very significant
milestone not only for the Company but also for the communities
amongst whom we operate and for the Liberian Government."
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. Accordingly, the Loan Agreement 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 Agreement are fair and
reasonable insofar as the Company's shareholders are concerned.
- END -
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
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
MSCOKDDQABDDAKD
(END) Dow Jones Newswires
October 12, 2017 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