Business
US$6.4 Million Acquisition
US$6.4 Million Acquisition.
About this update from Aep Plantations Plc
[{"type":"text","content":"\n Anglo-Eastern Plantations PLC\n17 May 2007\n\n\nThursday 17 May 2007\n\n ANGLO-EASTERN PLANTATIONS MAKES US$6.4 MILLION ACQUISITION\n\nAnglo-Eastern Plantations Plc, which owns 35,000 hectares (ha) of plantations,\nprimarily oil palm in Indonesia, has entered a contract to acquire 90% of the\nissued share capital of P T Cahaya Pelita Andhika, an Indonesian company whose\nprincipal asset is an oil palm estate in the province of North Sumatra with a\nland title area of 4,469ha, of which 2,750ha are planted. One of Anglo-Eastern's\nexisting local partners will acquire the balancing 10% of the issued capital.\n\nThe transaction requires the approval of the Indonesian Investment Co-ordination\nBoard and is subject to the satisfactory completion of investigations into the\naffairs of the company.\n\nThe total consideration is US$6.37 million, of which $2.5 million has been paid\non entering the contract. The balance is payable on or before 11 July 2007\nfollowing completion of satisfactory due diligence. Financial data from the\ncompany is not comprehensive but sufficient for the group to enter the contract;\nthere are no significant third party liabilities and, other than the land\ntitles, the company has no other significant assets. The area has been surveyed\nby the group's field staff and initial searches indicate the land title is in\norder. The consideration is payable in cash from Anglo-Eastern's own resources.\n\nPlantation land in Indonesia is held under leases of between 25 and 35 years\nwhich are renewable. The lease of Cahaya Pelita Andhaka runs to 2029, when it\nshould be renewable for between a further 25 and 55 years.\n\nCahaya Pelita Andhaka is located on the west coast of North Sumatra, about 30km\nfrom the town of Sibolga and about 300km from the provincial capital of Medan;\nit is not near any of Anglo-Eastern's other estates. The estate has no oil mill,\nand fresh fruit bunches (FFB) will continue to be sold to mills in the region\nuntil it is economic to construct a mill on the estate, likely to be in 2009/10.\nTerrain and rainfall are very suitable for oil palms.\n\nPlanted on average about 11 years ago, the estate is in need of major\nrehabilitation, the cost of which is expected to require a further US$1.8\nmillion. Planting of the existing vacant area of about 1,700ha will be\nundertaken in 2008. There are ...