Business
Funding arrangements and new joint venture partner
Funding arrangements and new joint venture partner.
About this update from Capital Metals Plc
[{"type":"text","content":"\n \nRNS Number : 4474S Equatorial Palm Oil plc 07 November 2013 \n \n\n7 November 2013\nEQUATORIAL PALM OIL PLC\n(\"EPO\" or the \"Company\")\n \nFunding arrangements and new joint venture partner and significant shareholder\nFunding arrangements\nEquatorial Palm Oil PLC (AIM: PAL.L) is pleased to announce that it has entered into various agreements relating to a loan and liability assignment arrangement with Kuala Lumpur Kepong Berhad (\"KLK\") (the \"Agreements\"). In addition, KLK has today announced that it has entered into various arrangements with Biopalm Energy Limited (\"BEL\"), including the proposed acquisition of BEL's 50.0 percent shareholding in Liberian Palm Developments (\"LPD\") and BEL's 20.1 per cent. interest in the issued ordinary share capital of EPO at a price of 5 pence per ordinary share.\nUnder the terms of the Agreements, KLK will provide a loan of $2,000,000 to EPO's 50 per cent. owned joint venture company, LPD (the \"KLK Loan\"). \nIn addition, for a consideration of $2,000,000 payable to the Company, EPO has agreed to assign to KLK $6,000,000 of the outstanding liabilities due to EPO from LPD (the \"Assignment\") \nSimultaneously with the Company entering into the Agreements, EPO has also agreed to provide a loan of $2,000,000 to LPD (the \"EPO Loan\"). Subsequent to the Assignment and the EPO Loan, the total liabilities owed to EPO by LPD amount to $5,100,000.\nBoth the KLK Loan and the EPO Loan will have a five year term and will accrue interests at a rate of LIBOR + 4% or 8% per annum, whichever is higher. In respect of both loans, interest will accrue on the principal amount of the loan (including any accrued interest) and is repayable in full at the end of the five year term or earlier, at the discretion of LPD. The KLK Loan and up to $2,000,000 of the Assignment will rank first in priority of payment of the liabilities owed by LPD. \nAs a result of the EPO Loan and the KLK Loan, EPO and KLK will provide, in aggregate, funds of $4,000,000 to LPD for the continued development of its projects in Liberia. The directors of EPO are pleased to report that this funding will allow LPD to return to normal operations within the next two months.\nAbout KLK\nKLK began as a plantations company more than 100 years ago and is now listed on the Main Market of Bursa Malaysia Securities Berhad with a...