4th Sep 2019 13:29
(Alliance News) - MP Evans Group PLC on Wednesday said it has agreed to pay USD25.4 million in cash to acquire shares in its own Indonesian operating subsidiaries from PT Austindo Nusantara Jaya.
Shares in MP Evans were down 3.5% at 660.00 pence in London in afternoon trade.
The acquisition of Austindo Nusantara Jaya's minority stake in the subsidiaries, which produce palm oil, is equivalent to the acquisition of an interest in a further 2,200 hectares of planted land held under the licences.
The purchase price is based on an average price per planted hectare of USD9,500, adjusted for working capital. The average price is below independent valuations due to the "minority nature of the shareholding" and low prices for crude palm oil.
The acquisition is to be funded through additional debt, which MP Evans said "remains at a prudent level".
Austindo Nusantara Jaya has separately agreed to sell its remaining shares to Praba Madhavan PA Madhavan, meaning it will have no remaining stake. Madhavan, an Indonesian citizen, will then become a 5% minority shareholder in all of MP Evans's Indonesian subsidiaries except PT Gunung Pelawan Lestari.
MP Evans Chair Peter Hadsleu-Chaplin said: "'The acquisition of these minority holdings consolidates our holding in the high-quality estates that we have owned and managed for many years at a price that represents a low risk and attractive return to shareholders."
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