Equatorial Palm Oil Share Discussion Threads

[kenatbabken] 13/10/2011 09:40

Good recovery here over the last few days

[mdchand] 10/10/2011 10:08

The funds were put in place to accelerate the plantation and cultivation of crop. However, I suspect that finance were never going to be drawn down in day 1. Strikes me that they are simply using those monies for a more remunerative return than leaving money in the bank.

[gopher] 06/10/2011 09:13

No reason given - I thought that entering into the joint venture would provide a source of funds not the opposite

[hvs] 06/10/2011 07:45

And now they are IN THE MONEY LENDING BUSINESS ?

Very very FISHY.

RNS Number : 6486P

Equatorial Palm Oil plc

06 October 2011

6 October 2011

EQUATORIAL PALM OIL plc

("EPO" or the "Company")

USD$10 million Term Loan Facility Agreement

Equatorial Palm Oil plc, (AIM: PAL), the AIM listed palm oil development company with operations in Liberia, announces that on 5 October 2011 a group company, Liberian Palm Developments Limited ("LPD"), entered into a loan facility agreement with Geoff Palm Limited ("GPL"), and Broadcourt Investments Limited ("BIL") (the "Loan Agreement").

Background

GPL and BIL are companies related to BioPalm Energy Limited ("BPL"), a 26.7% shareholder in EPO. BPL is a member of the Siva group of companies (the "Siva Group"), with whom EPO's wholly owned subsidiary, Equatorial Biofuels (Guernsey) Limited entered into a joint venture agreement in December 2010. It is this joint venture company, LPD, which has entered into the Loan Agreement.

Under the terms of the Loan Agreement, LPD will provide GPL with US$10 million for a period of six months (the "Loan"), BIL has provided certain guarantees to LPD in relation to the Loan, the details of which are set out below.

Through its wholly owned subsidiary, SPZ Enterprise Pty Limited ("SPZ"), GPL has a large scale oil palm project in Papua New Guinea ("PNG"), an established palm oil producing country, where it has signed long term leases with the PNG Government (the "Projects"). The Projects cover an area of 110,000 hectares with 89,000 hectares suitable for the cultivation of oil palm. The Loan, which has been provided as bridge financing, will allow GPL to accelerate its planting schedules.

The directors of EPO (the "Board") believe that, in addition to the potential long term strategic benefits of strengthening the relationship with BPL and the wider Siva Group, the Loan Agreement provides LPD with an opportunity to generate a competitive rate of return on the cash funds held and also provides EPO with exposure to a major oil palm project outside of West Africa.

Key terms of the Loan Agreement

The key terms of the Loan Agreement are set out below:

-- The Loan is for a 6 month period;

-- Interest on the principal sum will accrue at the greater of LIBOR plus 4% per annum or 5% per annum and a transaction fee is payable at the rate of 1% on the Loan;

-- The interest and the principal sum are repayable in one single payment on the expiry of the 6 month period. However, GPL may repay the monies prior to this date without penalty;

-- The Loan will be secured by a guarantee provided by BIL. In addition LPD will be granted a charge over 45% of the shares held by GPL in the share capital of SPZ; and

-- The Loan Agreement contains various customary representations, warranties and undertakings from GPL.

In addition to the security granted under the Loan Agreement, each of LPD and BPL have undertaken that in the event GPL defaults in repaying the Loan or any other monies payable by it under the Loan Agreement ("Outstanding Monies") an amount of cash equivalent to the Outstanding Monies will be transferred to EPO from LPD. In the absence of sufficient funds being available for transfer, the Outstanding Monies will be recorded as a debt due and owing by LPD to EPO.

As a result of the fact that the funds to be advanced under the Loan Agreement will be provided to a party related to a substantial shareholder in the Company, the entering into of the Loan Agreement by the Company constitutes a related party transaction for the purposes of the AIM Rules for Companies. The independent Directors of the Company, being the Directors with the exception of Shankar Varadharajan, who is a Siva Group appointee (the "Independent Directors") consider, having consulted with Strand Hanson Limited ("Strand Hanson"), the Company's Nominated Adviser, that the terms of the Loan Agreement are fair and reasonable insofar as the Company's shareholders are concerned. Strand Hanson has taken into account the Independent Directors' commercial assessment of the Loan Agreement.

For further information, please contact:

[gopher] 05/10/2011 18:05

And the share price falls on an up day. Worrying?

[pugugly] 05/10/2011 13:06

SP going to hell - If it continues at this rate I suspect we could see a very low ball t/o bid from the JV partner - That is assuming there are no fundamental problems with the assets, country or infrastructure.

Anyone like to guess a takeout price ?

[katie priceless] 04/10/2011 09:25

Silly comment

[cisk] 29/9/2011 12:59

All - this is very much a buy and tuck away for a few years share- given it's lowly mkt cap of £15m against giants like NBPO with a £1.2b cap, it's got potential...

They have $25m on cash on the books, an asset growing in value and will be producing it's first sales soon - and yet the mkt cap is only £15m.

I've talked myself into buying a few more...

[jbarcroftr] 29/9/2011 12:22

As far as I am concerned the Company has done all it promised.The J V is great because for 50 percent dilution we have no funding issues.If the company had carried on with it's original plan it would have been coming back to the Market every 18 months or so for funding.Additionally an experienced JV partner brings expertise to the table.I view this a a long term hold.

[kenatbabken] 29/9/2011 10:51

Nice to see that they are producing cash flow albeit at a lower capacity than
they were predicting in june when they said that they would be producing 15 tonne
CPO a day by July but I suppose the plant is having to be fine tuned.The 3500 hectares based on Malaysian yields would see 66,500 tonnes fresh fruit
bunches produced per season which at 17% extraction rate equals 11,300 tonnes
CPO I doubt whether the palms would be yielding those rates yet but it gives an idea of short term cash flow and once the planted seedlings start to produce
there is likely to be a substantial ramp up to production.
It would be nice to know what sort of price for CPO can be achieved in Africa

[pugugly] 29/9/2011 10:48

mdchand:> If I read accounts correctly they only have a half interest in the 160K hectares due to the 50% JV. Do you agree ?

[mdchand] 29/9/2011 08:58

Still here - its been treated like an oil explorer ie all jam tomorrow with a high likelihood of hitting zilch. Market simply doesn't care about the longer term potential here. 160k hectares, $30m cash / $30m guaranteed finance - fully funded for the forseable future. Massively cheap, but whose to say it won't get cheaper.

[cisk] 29/9/2011 07:21

Results out. Did I read it correct that they have 600 MT of CPO stored, in the process of being sold?

By my calculations this should be worth circa $0.5m?

Surely this is one of the most undervalued plays on CPO around?

Anyone any thoughts?

Regards

Cisk

[hvs] 28/9/2011 13:02

hvs - 11 Jul'11 - 15:20 - 289 of 309 edit


Is there no plam oil then ?

[hvs] 28/9/2011 13:02

hvs - 11 Jul'11 - 15:20 - 289 of 309 edit


Is there no plam oil then ?

[katie priceless] 21/9/2011 19:36

That's an old articular . Seem's all Palm oil co's are down PAL more then most.

[behappy69] 20/9/2011 13:46

Michael Frayne said we'd have big flows of oil in Irvine Energy when he was there. We ended up with a trickle and delisting.

[p@] 14/9/2011 18:59

Looks like you might have found a problem Ken,but it could be market sentiment.Extract from JP Evans results today:--- 'Palm-oil prices averaged US$1,195 per tonne, 48% higher than US$809 in first half

2010'

[kenatbabken] 14/9/2011 18:02

The Interims last year were the 24th September so should be around that date
this year,I did send an email asking about the performance of the Mill as they said in June that they would be producing 15 tonne a day of CPO by July but did
not get a reply and in the meantime the share price is getting trashed

[jbarcroftr] 14/9/2011 15:42

Anyone know if we are expecting interim results/update soon?