Equatorial Palm Oil plc Loan of $20.5m Secured for Joint Venture Company (2343D)

TIDMPAL

RNS Number : 2343D

Equatorial Palm Oil plc

27 January 2015

EQUATORIAL PALM OIL plc

("EPO" or the "Company")

Loan of $20.5m Secured 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 $20.5m loan agreement ("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 provision of funding pursuant to the Loan Agreement was a commitment given by KLK Agro pursuant to the joint venture with LPD, which was announced on 11 April 2014.

The key terms of the loan are as follows:

   --      Amount - $20.5m 
   --      Term - 5 years 
   --      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

Geoffrey Brown, Executive Director of EPO, commented:

"We are very pleased that LPD has now secured this $20.5m loan with KLK Agro for the development of our oil palm estates in Liberia. We continue to be very well supported by KLK and this funding will enable our operations to enter the next phase of growth in order to drive value for all shareholders."

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 7493 
  Geoffrey Brown (Executive Director)              7671 
 Strand Hanson Limited (Nominated Adviser)        +44 (0) 20 7409 
  James Harris / Andrew Emmott / 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

JVEKMGZMLNGGKZG

Equatorial Palm Oil (LSE:PAL)
Historical Stock Chart
From Jun 2024 to Jul 2024