Equatorial Palm Oil plc Broadcourt Investments subscribes to new shares (2403Y)
February 20 2013 - 2:00AM
UK Regulatory
TIDMPAL
RNS Number : 2403Y
Equatorial Palm Oil plc
20 February 2013
20 February 2013
EQUATORIAL PALM OIL plc
("EPO" or the "Company")
Broadcourt Investments subscribes to new shares in EPO
Equatorial Palm Oil is pleased to announce that Broadcourt
Investments Ltd ("Broadcourt"), a company associated with EPO's
largest shareholder BioPalm Energy Limited ("BioPalm Energy"), has
today subscribed for 6,927,658 ordinary shares of 1 pence each in
the Company ("Ordinary Shares") at a price of 12 pence per share
(the "Subscription") for an aggregate consideration of
GBP831,319.
The Subscription proceeds received by EPO will be used to
provide a loan of $1.2m to EPO's joint venture ("JV") company,
Liberian Palm Developments Limited ("LPD")(the "Loan"). The funds
will provide short-term financing to support LPD's ongoing
development of its oil palm projects in Liberia, West Africa, in
advance of the anticipated funding from the African Export-Import
Bank ("AFB") being raised for the Company. AFB was appointed as a
corporate advisory partner to LPD as announced on 13 February
2013.The Loan will be provided to LPD on a short-term basis with
interest payable at a fixed rate of 8 per cent per annum. The Loan
is repayable on funding being received from AFB or 12 months from
19 February 2013, whichever is earlier, and is secured on the
assets of LPD.
Following the Subscription, BioPalm Energy and Broadcourt will
be interested in 40,260,991 Ordinary Shares representing 29.77 per
cent of the Company's issued share capital post the Subscription.
The Subscription price of 12p per share represents a premium of
18.58 per cent over EPO's closing share price on 19 February
2013.
The new Ordinary Shares have been issued and allotted utilising
the Company's existing share allotment authorities. Application
will be made as soon as practicable for the admission of the new
shares to trading on AIM and admission is expected to take place on
26 February 2013.
Background to and reasons for the Subscription
Under the terms of the joint venture agreement between EPO and
BioPalm Energy, entered into in December 2010, EPO and BioPalm
Energy contributed, in aggregate, $30 million into LPD, which is
now largely invested.
LPD recently appointed AFB for the purpose of securing a
proposed $140 million financing facility. This capital, if secured,
will be used to fund the Palm Bay oil palm project located near the
deepwater port of Buchanan in Liberia, West Africa. LPD is seeking
to raise a first tranche of funding, amounting to $10m, by the end
of Q1 2013. Of the debt finance to be raised by AFB for LPD, the
first $30m drawn by LPD will be guaranteed by BioPalm Energy or one
of its associated companies in accordance with the terms set out in
the JV agreement.
Business Update
During 2012, new plantings progressed well, with 1,250 hectares
of new planting completed. LPD currently has in excess of 8,000 ha
of seedlings in its nurseries, which are expected to be planted
during 2013 and 2014. Furthermore, LPD appointed Ore Search Civil
Liberia Ltd ("OSC"), an international earth moving contractor, to
assist in land preparation at both the Palm Bay and Butaw Estates.
The appointment of OSC will be significant in helping the Company
achieve its strategic objectives through expanding the nurseries
and land preparation effortsin order to deliver on the large scale
planting programme.
Michael Frayne, Chairman of EPO, commented:
"Our focus remains committed to moving forward with the
large-scale planting programme at both Palm Bay and Butaw Estates
through 2013 and beyond. The additional equity raised via
Broadcourt will provide financial support to LPD while we finalise
our longer term funding. It also signifies the strength and
commitment of the joint venture partnership in working towards
EPO's objective of becoming a leading West African palm oil
producer."
Related Party Transactions
BioPalm Energy currently holds 33,333,333 Ordinary Shares in EPO
representing approximately 25.98 per cent of the issued share
capital of the Company. BioPalm Energy currently holds 50 per cent
of the issued share capital of LPD. Accordingly, the Subscription
and the Loan are related party transactions under the AIM Rules.
The Independent Directors of EPO, being all the directors other
than Shankar Varadharajan, a Biopalm Energy director, having
consulted with Strand Hanson Limited, the Company's nominated
adviser, consider the terms of the Subscription and the Loan to be
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 7766
Michael Frayne (Chairman) 7555
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
Pelham Bell Pottinger (Financial / Corporate
PR) +44 (0) 20 7861
Archie Berens / Joanna Boon 3867
Notes to editors:
Equatorial Palm Oil plc (EPO) is an AIM listed crude palm oil
(CPO) 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 significant land position in Liberia, EPO is geographically
well positioned to serve the international and regional markets and
is committed to making a positive impact on the community through
investment in local schools, health clinics, housing and
infrastructure.
The Company's 50:50 joint venture partner in LPD is Biopalm
Energy Ltd, a subsidiary of the Siva Group, which invests in oil
palm projects around the world.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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