2nd Nov 2023 12:23
(Alliance News) - REA Holdings PLC on Thursday said backer PT Dharma Satya Nusantara Tbk plans to invest a further USD50 million in PT REA Kaltim plantations, and that it plans to sell subsidiary CDM for around USD75 million.
The stock was up 14% at 67.00 pence in London on Thursday afternoon.
REA is a London-based company engaged in oil palm cultivation in Indonesia, as well as in producing crude palm and palm kernel oil.
REA said the proposed further investment of approximately USD50 million will increase DSN's 15% stake in REA Kaltim to 35%. The subscription is expected to complete by mid-July next year.
REA also said it may sell REA Kaltim's subsidiary CDM to DSN, to which it has granted a priority right to the acquisition. It values CDM at USD25 million and expects net proceeds of about USD75 million, allowing it to reduce net debt to around USD110 million and strengthen its balance sheet.
REA expects the acquisition, if it proceeds, to complete by May 31.
By Emma Curzon, Alliance News reporter
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