First Day of Dealings on AIM
February 26 2010 - 3:00AM
UK Regulatory
TIDMPAL
RNS Number : 7093H
Equatorial Palm Oil
26 February 2010
Equatorial Palm Oil plc / Index: AIM / Epic: PAL / Sector: Food Producers
26 February 2009
Equatorial Palm Oil plc ('EPO' or 'the Company')
First Day of Dealings on AIM
Equatorial Palm Oil plc, aiming to become a sustainable, low-cost producer of
crude palm oil ('CPO'), is listing on AIM today. The Company has raised
approximately GBP6.5 million before expenses by way of a placing of 37,118,000
new Ordinary Shares at 17.5 pence per share ('the Placing'), giving it a market
capitalisation of approximately GBP14.3 million on Admission. The money raised
will be used to develop sustainable palm oil plantations and a CPO processing
operation in Liberia, where the Company controls circa 169,000 hectares of land.
Mirabaud Securities LLP and Shore Capital Stockbrokers Limited are Joint
Brokers to the Company and Shore Capital and Corporate Limited is its Nominated
Adviser.
Overview
· Objective to become a major producer of sustainable, low-cost CPO
· Seeking admission to AIM in order to have access to equity capital
markets and raising
approximately GBP6.5 million before expenses
· Extensive land bank of circa 169,000 hectares, approximately 89,000
held under two 50 year
leases ratified by the Government of Liberia
· Proven suitability for sustainable development of oil palm plantations
located near the coast in
Liberia, West Africa
· Three core business activities: the rehabilitation of existing oil palm
plantations to provide early
cashflow; the development of new plantations;
and the development of out-grower small holdings
· Operating in Liberia provides low cost production environment,
immediate access to the West
African palm oil market and stable political
environment
· Major interest in development of Liberian palm oil industry by
international palm oil producers
such as Sime Darby
· Growth market - demand of CPO forecast to grow by an annualised growth
rate of 5-6 per cent.
between 2008 and 2015
· Long term strategy to target 100,000 hectares and CPO production of up
to 500,000 tonnes per
annum
· Management team has extensive international experience in managing
large scale oil palm
plantations
EPO Chairman, Michael Frayne, said, "EPO offers a fantastic opportunity to enter
into the fast growing and highly lucrative palm oil market. Our aim is to be a
sustainable, low-cost producer of crude palm oil in Africa through the
reactivation and development of existing plantations and our agricultural land
holding in Liberia. Our extensive land bank of c.169,000 hectares has proven
suitability for sustainable cultivation of oil palms, and offers short-term cash
flow with high longer term capital growth.
"Our three project areas will be advanced in tandem with active out-grower
programmes, which will importantly provide major employment to the country. The
projects lie between the Ports of Buchanan and Greenville, which means our palm
oil processing mill, due to be running later this year, will benefit from easy
access to the West African market. Immediate reactivation of 3,000 hectares of
existing plantation will provide for early cash flow and will demonstrate
business scalability. This new estate development should immediately enhance
land valuations - values of developed oil palm plantations are in the range of
US$15,000-22,000 per hectare.
"As the most important and widely produced edible oil in the world, demand for
palm oil is projected to continue to grow at 5-6% per annum over the next five
years, driven by demand in Africa, India, China and the US, in addition to
renewable energy demand. Importantly, the oil palm is indigenous to West Africa
so with the application of SE Asian techniques and the latest seed genetics, we
believe that Africa could again become a key player in the world palm oil
market, devoid of the major environmental issues surrounding the development of
palm oil plantations in other parts of the world. Importantly, Liberia is a
newly politically stable country and is becoming a fast growing investment
destination for multi-national corporations, with major international companies
operating including Arcelor Mittal, Firestone and Sime Darby, who are developing
220,000 hectares of palm oil and rubber plantations, all with an established
presence.
"These are exciting times for EPO. We have a fantastic land holding, a
management with large scale oil palm plantation development experience, having
worked with the likes of New Britain Palm Oil and Harrisons & Crosfields Plc, a
defined development schedule and a strong institutional share register that
recognise that EPO offers a comparatively low cost entry point for palm oil
development and investment."
For further information please visit www.epoil.co.uk or contact:
+--------------+---------------------------+-------------------+
| Michael | Equatorial Palm Oil plc | Tel: 020 7766 |
| Frayne | | 7555 |
+--------------+---------------------------+-------------------+
| Jonathan | Mirabaud Securities LLP | Tel: 020 7484 |
| Colville | | 3510 |
+--------------+---------------------------+-------------------+
| James Leahy | Mirabaud Securities LLP | Tel: 020 7484 |
| | | 3510 |
+--------------+---------------------------+-------------------+
| Dru Danford | Shore Capital & Corporate | Tel: 020 7408 |
| | Limited | 4090 |
+--------------+---------------------------+-------------------+
| Edward | Shore Capital & Corporate | Tel: 020 7408 |
| Mansfield | Limited | 4090 |
+--------------+---------------------------+-------------------+
| Pascal Keane | Shore Capital & Corporate | Tel: 020 7408 |
| | Limited | 4090 |
+--------------+---------------------------+-------------------+
| Hugo de | St Brides Media & Finance | Tel: 020 7236 |
| Salis | Ltd | 1177 |
+--------------+---------------------------+-------------------+
| Paul Youens | St Brides Media & Finance | Tel: 020 7236 |
| | Ltd | 1177 |
+--------------+---------------------------+-------------------+
Further Information
Introduction
EPO's objective is to become a producer of sustainable, low-cost CPO and to this
end it has extensive operations located near the coast in Liberia, West Africa.
The Company's operational strategy is expected to be implemented through three
core business activities: the rehabilitation of existing oil palm plantations;
the development of new plantations; and the development of out-grower small
holdings. The Group has secured Government ratified Investment Agreements in
Liberia for the investment, rehabilitation and participation by the Group over a
sizeable acreage of existing oil palm plantations. EPO's operations have
already commenced at the Butaw Plantation and Palm Bay Plantation.
Key strengths
Early cashflows are expected to be generated from the rehabilitation of existing
plantations and commissioning of the Company's first CPO processing mill. In
addition, the Directors believe that the Company is well positioned to deliver
significant value for its shareholders, for the following reasons:
· The Group has secured Government ratified Investment Agreements
covering two sizeable
plantations in Liberia, and entered into a Memorandum
of Intent over a third area for plantation
development;
· The locations of the plantations benefit from favourable rainfall and
suitable soil conditions;
· Management team has extensive international experience in managing
large scale oil palm
plantations;
· Operating in Liberia provides the Group with a low cost production
environment;
· Liberian plantations can provide immediate access to the West African
CPO market; and
· CPO demand is forecast to continue growing by an annualised growth rate
of 5-6 per cent.
between 2008 and 2015.
Market
Due to its abundant availability, low-cost and diverse functionality, CPO is the
most widely produced edible oil in the world, with around 43 million tonnes
produced in 2008. According to the Independent Palm Oil Market Study, CPO
demand is forecast to continue growing by an annualised growth rate of 5-6 per
cent. between 2008 and 2015.
Sustainability
The Company is committed to developing its project in a sustainable manner and
as part of that commitment it joined the Roundtable on Sustainable Palm Oil
("RSPO") on 11 September 2007 and intends, on commencement of production of
CPO, to become a certified RSPO producer. The Company's existing plantations
are based on previously logged land so will not cause degradation to primary
forested areas in Liberia.
Liberia
Liberia emerged from over ten years of civil war in 2003. In January 2006, the
US-educated economist and former finance minister, Mrs Ellen Johnson-Sirleaf,
was inaugurated as Africa's first elected female head of state. The new
government has implemented numerous initiatives in tandem with international
development agencies to rebuild its infrastructure and economy. During the past
24 months, Liberia has been visited by the leaders of China and the USA,
highlighting the strategic importance of Liberia in the region. On 14 March
2008, the IMF fully restored Liberia's IMF status and approved an immediate
financial support of approximately US$900 million. During the past 18 months
investment agreements with number of large conglomerates, including Sime Darby
and China Union, have been signed further highlighting the investment potential
of Liberia.
Key Management
The management team has extensive international experience in managing oil palm
plantations and is comprised of executives based in Liberia and the UK.
The Board is chaired by Michael Frayne, one of the founders of the Company, who
has previously worked for a range of companies within the resource, commodity
and energy sectors.
Peter Bayliss is Managing Director with circa 20 years experience in the
plantation sector. He previously worked for New Britain Palm Oil in Papua New
Guinea and PT PP London Sumatra Indonesia where he was directly responsible for
the implementation in Indonesia of a 10-year programme to plant 187,000 hectares
of palm oil and 26,000 hectares of rubber throughout Indonesia.
Geoffrey Brown is Plantations Director with over 40 years experience in the
plantation sector. He was formerly executive Chairman of London Sumatra
Indonesia and an executive director of Harrisons & Crosfield Plc.
The Non-executive Directors are Joseph Jaoudi, an Advisory Board Member of First
Pacific Bank in San Diego County and shareholder/director of a number of
companies that have operated and traded in Liberia and Anthony Samaha, who is
also an executive director of AIM quoted resources company Altona Energy Plc.
Reasons for the Placing and Admission
The Company is seeking admission to AIM in order to have access to equity
capital markets, and is seeking to raise approximately GBP6.5 million before
expenses through the Placing and first tranche of the Subscription Shares
(excluding the Subscription Shares to be issued after Admission under the
Investor Subscription Letter). The expected net proceeds of the Placing and
first tranche of the Subscription Shares of approximately GBP5.7 million
(excluding the Subscription Shares to be issued after Admission under the
Investor Subscription Letter) are expected to be used to rehabilitate
approximately 3,000 hectares of existing palm tree plantations, the
commissioning of a CPO processing mill at the Palm Bay Plantation, commencement
of civil and construction works, commencement of tree nursery operations, and
the clearing and preparation of new plantation areas. Pursuant to the Investor
Subscription Letter the Company expects to raise approximately a further GBP1.15
million after Admission.
* * ENDS * *
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCDMGZZVKDGGZM
Equatorial Palm Oil (LSE:PAL)
Historical Stock Chart
From Jun 2024 to Jul 2024
Equatorial Palm Oil (LSE:PAL)
Historical Stock Chart
From Jul 2023 to Jul 2024
