17th May 2007 08:37
Anglo-Eastern Plantations PLC17 May 2007 Thursday 17 May 2007 ANGLO-EASTERN PLANTATIONS MAKES US$6.4 MILLION ACQUISITION Anglo-Eastern Plantations Plc, which owns 35,000 hectares (ha) of plantations,primarily oil palm in Indonesia, has entered a contract to acquire 90% of theissued share capital of P T Cahaya Pelita Andhika, an Indonesian company whoseprincipal asset is an oil palm estate in the province of North Sumatra with aland title area of 4,469ha, of which 2,750ha are planted. One of Anglo-Eastern'sexisting local partners will acquire the balancing 10% of the issued capital. The transaction requires the approval of the Indonesian Investment Co-ordinationBoard and is subject to the satisfactory completion of investigations into theaffairs of the company. The total consideration is US$6.37 million, of which $2.5 million has been paidon entering the contract. The balance is payable on or before 11 July 2007following completion of satisfactory due diligence. Financial data from thecompany is not comprehensive but sufficient for the group to enter the contract;there are no significant third party liabilities and, other than the landtitles, the company has no other significant assets. The area has been surveyedby the group's field staff and initial searches indicate the land title is inorder. The consideration is payable in cash from Anglo-Eastern's own resources. Plantation land in Indonesia is held under leases of between 25 and 35 yearswhich are renewable. The lease of Cahaya Pelita Andhaka runs to 2029, when itshould be renewable for between a further 25 and 55 years. Cahaya Pelita Andhaka is located on the west coast of North Sumatra, about 30kmfrom the town of Sibolga and about 300km from the provincial capital of Medan;it is not near any of Anglo-Eastern's other estates. The estate has no oil mill,and fresh fruit bunches (FFB) will continue to be sold to mills in the regionuntil it is economic to construct a mill on the estate, likely to be in 2009/10.Terrain and rainfall are very suitable for oil palms. Planted on average about 11 years ago, the estate is in need of majorrehabilitation, the cost of which is expected to require a further US$1.8million. Planting of the existing vacant area of about 1,700ha will beundertaken in 2008. There are indications that further land may be available forpurchase in this region including rights of Cahaya Pelita Andhaka to 2,000hawhich have expired. The initial annual crop of FFB is expected to be only7,000mt (less than 2% of the existing group's), but this should build upstrongly over the next few years. A small loss of around $0.5 million can beexpected in the first year, after which the estate's contribution should risestrongly. Mr T H Chan, Chairman, commented "The acquisition of Cahaya Pelita Andhaka oilpalm estate is part of Anglo-Eastern's continuing strategy to grow through thepurchase of medium-sized planted estates, as well as through development of thegroup's existing and future land reserves, while taking advantage of thestrength of the group's balance sheet. We hope that this acquisition will havethe same success as that of Bina Pitri, a derelict 4,900ha estate which weacquired in 2004 and which is now making a significant contribution. The totalplanted area of the group immediately following this acquisition will be37,800ha and the total land area will be 49,300ha. We are continuing to searchactively for further expansion opportunities." Enquiries:Anglo-Eastern Plantations PlcRollo Barnes (Financial Director) 020-7236 2838 Bankside Consultants LimitedCharles Ponsonby 020-7367 8851 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Anglo-Eastern Plantations