Business
Statement re investment in REA Kaltim, replacement
Statement re investment in REA Kaltim, replacement.
About this update from R.e.a. Holdings Plc
[{"type":"text","content":"\n \nRNS Number : 4858Y R.E.A.Hldgs PLC 17 May 2016 \n\nR.E.A. Holdings plc (\"REA\", or the \"company\")\n \nThird party investment in PT REA Kaltim Plantations\n \nCorrection to gross assets of REA Kaltim and its subsidiaries from US$853.5 million to US$577.8\n \nREA is pleased to announce that it has reached a conditional agreement with PT Dharma Satya Nusantara Tbk (\"DSN\") pursuant to which it is proposed that PT Swakarsa Sinarsentosa, (\"SWA\"), a wholly owned subsidiary of DSN, will acquire a 15 per cent investment in the company's principal operating subsidiary in Indonesia, PT REA Kaltim Plantations (\"REA Kaltim\"). \n \nDSN is an Indonesian natural resources company listed on the Indonesia Stock Exchange in Jakarta and engaged in the business of oil palm plantations and wood products. DSN's plantation estates are based in East, Central and West Kalimantan, with the majority of the oil palm estates in East Kalimantan located close to REA Kaltim's estates.\n \nREA stated in its 2015 annual report, published on 25 April 2016, that it was in active discussions with a limited short list of interested parties primarily directed at securing a strategic third party investment in REA Kaltim. The directors believe that the proposed investment by, and joint venture with, SWA will bring significant mutual benefits in terms of opportunities for more efficient sourcing of supplies, for marketing and through exchanges of information on agronomic practices. Further, the proposal is in line with the directors' long-held intention to increase Indonesian participation in the ownership of the group's agricultural operations and will also serve to secure more permanent capital in the local operations of the REA group.\n \nUnder the terms of the conditional agreement (the \"Master Agreement\"), it is proposed that SWA will:\n \n1. acquire 650 outstanding class B shares in the capital of REA Kaltim, representing 5 per cent of the current issued share capital, and subscribe a further 1,530 class B shares in the capital of REA Kaltim, so as to bring its total shareholding in REA Kaltim to 2,180 shares, representing 15 per cent of the enlarged issued share capital of REA Kaltim; and\n\n2. provide loans to REA Kalti...