Business
USD60 million development JV
USD60 million development JV.
About this update from Capital Metals Plc
[{"type":"text","content":"\n RNS Number : 1633S Equatorial Palm Oil plc 06 September 2010 \n \n\nEquatorial Palm Oil plc / Index: AIM / Epic: PAL / Sector: Food Producers\n6 September 2010\nEquatorial Palm Oil plc ('EPO' or 'the Company')\nUS$60 million development JV agreement\n \nEquatorial Palm Oil plc, the AIM listed and Liberia focussed sustainable oil palm plantation developer, is pleased to announce that it has signed a Memorandum of Understanding ('MOU') with Biopalm Energy Ltd ('Biopalm Energy'), to form a US$60 million 50:50 Joint Venture company ('the JV') in order to accelerate the development of EPO's c.169,000 hectare land position and palm oil operations in Liberia. Biopalm Energy subscribed for £5 million of new equity in the Company in May of this year and is a wholly owned subsidiary of Siva Ventures Ltd, part of the Indian conglomerate Siva Group. \n \nUnder the terms of the MOU, which is legally non-binding, Biopalm Energy will invest an initial US$22.5 million in cash plus arrange and guarantee a US$30 million loan facility to the JV, while EPO will contribute US$7.5 million in cash to the JV which will, on completion, hold all of EPO's current land position in Liberia. The establishment of the JV will be subject to EPO shareholder and necessary regulatory approvals.\n \nEPO has a strategic development plan to plant 50,000 hectares of oil palm plantation within 10 years, targeting crude palm oil ('CPO') production of 250,000 tpa (current palm oil price US$925 per tonne CIF Rotterdam), increasing to 100,000 hectares planted. Initial production of CPO is planned to commence in Q4 2010 with the Company's first palm oil processing mill already under construction. It is envisaged that the additional finance will enable all operations across the three plantation areas of Palm Bay, Butaw and River Cess, as well as the active out grower programme, to be fast tracked. Investment in associated and downstream infrastructure will also be accelerated. \n \nUpon finalisation of a legally binding JV agreement, a circular will be published and sent to the Company's shareholders highlighting the key terms of the agreement, providing further information on the development objectives aimed at maximising the value of EPO's Liberian operations, and convening a general meeting of the ...