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Share Name Share Symbol Market Type Share ISIN Share Description
R.e.a. Holdings Plc LSE:RE. London Ordinary Share GB0002349065 ORD 25P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  -1.50 -2.68% 54.50 54.00 55.00 55.00 54.50 55.00 25,642 11:32:03
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Food Producers 105.5 -5.5 -54.4 - 24

R.E.A. Holdings plc: Update re certain matters

07/12/2020 12:08pm

UK Regulatory (RNS & others)


 
 R.E.A. Holdings plc (RE.) 
R.E.A. Holdings plc: Update re certain matters 
 
07-Dec-2020 / 12:08 GMT/BST 
Dissemination of a Regulatory Announcement that contains inside information 
according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group. 
The issuer is solely responsible for the content of this announcement. 
 
R.E.A. Holdings plc ("REA") 
 
Update re certain matters 
 
Selling prices 
 
Since May 2020, the price of crude palm oil ("CPO"), CIF Rotterdam, has 
risen from a low of $510 per tonne to a current price of $920 per tonne. 
Whilst the higher prices now prevailing are materially beneficial to REA, 
the extent of the benefit is reduced by two imposts chargeable on exports of 
Indonesian CPO: export duty and export levy. 
 
Export duty is a tax payable to the Indonesian government. Export levy is 
payable to a dedicated fund which utilises levy income to subsidise the 
manufacture of biodiesel from CPO and to support other measures designed to 
benefit the growing of oil palms in Indonesia. According to Oil World, 
Indonesian biodiesel will consume approaching 8 million tonnes of CPO in 
2020 and the Indonesian government has stated that it is committed to 
increasing the mandatory usage of biodiesel in transport fuel. 
 
Because biodiesel is a substitute for petroleum based diesel oil, it has to 
be priced on a basis that reflects prevailing levels of petroleum oil 
prices. As a result, at current CPO prices, the manufacture of biodiesel 
would be uneconomic without the subsidy funded by the export levy. 
 
Both export duty and export levy are calculated on sliding scales by 
reference to a CPO reference price that is set periodically by the 
Indonesian government on the basis of CIF Rotterdam and other recognised 
benchmark CPO prices. Following the rise in the CPO price referred to above, 
the Indonesian government has recently announced changes to the export levy 
scale. As a result, the combined incidence of export duty and export levy at 
different CPO reference prices is as shown by the table annexed to this 
announcement. The current CPO reference price is $870.77. 
 
CPO produced by REA is generally sold in the Indonesian local market. As 
such, group sales are not subject to export duty or export levy. However, 
arbitrage between the Indonesian local and international CPO markets 
normally results in a local price that is broadly in line with prevailing 
international prices after adjustment of the latter for delivery costs and 
export duty and levy. 
 
Bank financing 
 
Agreement has recently been reached with the group's Indonesian bankers on 
extension for a further year of the group's working capital facility, 
equivalent to some $5 million, which fell due for renewal in November 2020. 
Discussions are continuing as to possible additions to the group's term loan 
facilities to fund, in part, nearer term repayments due in respect of those 
facilities. 
 
Claims against coal interest 
 
As previously reported, PT Indo Pancadasa Agrotama ("IPA"), an Indonesian 
company owning a coal concession near Kota Bangun in East Kalimantan, to 
which REA has extended funding, has been the object of certain arbitration 
claims by two claimants (connected with each other) with whom IPA previously 
had conditional agreements relating to the development and operation of 
IPA's coal concession. REA was joined as a party to the arbitration on a 
prima facie basis and without prejudice to any final determination of 
jurisdiction. Further separate, but related, potential claims threatened by 
the two claimants in respect of, inter alia, alleged tortious conduct by 
REA's subsidiary, R.E.A. Services Limited, and its managing director were 
stayed pending a conclusion of the arbitration hearing. 
 
Following a virtual merits hearing of the arbitration claims at the end of 
June 2020, the arbitral tribunal has dismissed all claims in the arbitration 
against IPA and REA and has awarded costs on an indemnity basis to IPA. The 
tribunal's decision removes the grounds for the separate stayed claims in 
respect of tortious conduct. 
 
Trading update 
 
REA plans to issue an update on 2020 trading early in 2021. 
 
Enquiries: 
 
R.E.A. Holdings plc 
 
Tel: 020 7436 7877 
 
ANNEXURE 
 
COMBINED EXPORT LEVY AND EXPORT DUTY 
From         To           Levy     Duty    Total   Net price* 
$            $               $        $        $            $ 
0            670            55        -       55          615 
670          695            60        -       60          635 
695          720            75        -       75          645 
720          745            90        -       90          655 
745          750           105        -      105          645 
751          770           105        3      108          662 
770          795           120        3      123          672 
795          800           135        3      138          662 
801          820           135       18      153          667 
820          845           150       18      168          677 
845          850           165       18      183          667 
851          870           165       33      198          672 
870          895           180       33      213          682 
895          900           195       33      228          672 
901          920           195       52      247          673 
920          945           210       52      262          683 
945          950           225       52      277          673 
951          970           225       74      299          671 
970          995           240       74      314          681 
995          1000          255       74      329          671 
1001         1050          255       93      348          702 
1051         1100          255      116      371          729 
1101         1150          255      144      399          751 
1151         1200          255      166      421          779 
1201         1250          255      183      438          812 
1251         1300          255      200      455          845 
*At top of band 
 
ISIN:          GB0002349065 
Category Code: MSCM 
TIDM:          RE. 
LEI Code:      213800YXL94R94RYG150 
Sequence No.:  89166 
EQS News ID:   1153247 
 
End of Announcement EQS News Service 
 
 

(END) Dow Jones Newswires

December 07, 2020 07:08 ET (12:08 GMT)

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