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Joint Venture and Notice of G
Joint Venture and Notice of G.
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[{"type":"text","content":"\n RNS Number : 7128X Equatorial Palm Oil plc 09 December 2010 \n \n\nEquatorial Palm Oil\n \n(\"EPO\" or \"Company\")\n \nLegally Binding Joint-Venture signed with BioPalm Energy\nand\nNotice of General Meeting\n \nThe board of EPO (the \"Board\") announces that it has today posted a circular to shareholders (the \"Circular\") together with a notice convening a general meeting of the Company to approve the Joint Venture Agreement with BioPalm Energy Ltd. (\"BioPalm Energy\"). The Joint Venture Agreement is conditional on the approval of the Resolution by Independent Shareholders at the General Meeting, notice of which is set out in Part II the Circular. \n \nJoint Venture Agreement\nThe Joint Venture Agreement provides for equity investment in the Joint Venture Company (\"Palm Developments\") of US$30.0 million (US$7.5 million from Equatorial Bio-Fuel (Guernsey) Ltd., a subsidiary of EPO, on behalf of the Company and US$22.5 million from BioPalm Energy). Furthermore, BioPalm Energy will arrange and guarantee an additional US$30.0 million loan facility to the joint venture company. \n \nAs the operator of Palm Developments, EPO will use the resulting US$60 million to accelerate its strategic development plan in respect of its c.169,000 hectare land position at Palm Bay, Butaw and River Cess.\n \nThe Company's intention is to use the capital to aim to nearly double its previous planting targets each year from 2011 to 2014. The accelerated planting schedule will have the resultant impact downstream on harvesting rates, requiring faster investment in the associated infrastructure and palm mills to process palm fruit into CPO, palm kernel oil and palm kernel cake. The accelerated planting rates should also bring forward revenues generated from expected sales of CPO and other palm products. EPO believes this will have an overall positive impact on shareholder value. \n \nRelated Party Transaction\nBioPalm Energy currently holds 33,333,333 Ordinary Shares in EPO representing approximately 28.5 per cent of the issued share capital of the Company. Accordingly, BioPalm Energy is a related party for the purposes of Rule 13 of the AIM Rules and as a consequence is precluded from voting on the Resolution. The Independent Directors, having consulted with Shore Capital, the Comp...