Circ re. sale of Malaysian estate and investme...
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M. P. EVANS GROUP PLC
Sale of 660-hectare Malaysian estate
and investment in 12,000-hectare Indonesian oil palm project
M.P. Evans Group PLC is pleased to announce the sale of a 660-hectare Malaysian
estate for £4.3 million and an Investment in a 12,000-hectare Indonesian oil
palm project. These transactions represent the first stage of the implementation
of the board's new strategy adopted since the Company's recent merger with
Bertam Holdings PLC ("Bertam") and Lendu Holdings PLC ("Lendu"). As described
in the documents relating to the merger, the new strategy is to divest the
Group's relatively low-earning Malaysian plantations and reinvest the proceeds
in the higher-earning Indonesian palm-oil and Australian beef-cattle sectors.
With regard, specifically, to Indonesia, the aim is to acquire 50,000 hectares
of land which is suitable for oil-palm development, in addition to the Group's
existing plantations.
Sale of Sungei Reyla Estate
In line with this strategy, and as part of the means of financing the
expansionary programme in Indonesia, we are pleased to announce the sale of the
first of the Malaysian plantations, the 660-hectare Sungei Reyla Estate, for a
total selling price of RM31.4 million, approximately £4.3 million.
This sale is subject to 5% Malaysian Real Property Gains Tax and the related tax
charge is expected to be approximately RM1.4 million (approximately £0.19
million). The sale is also conditional upon the approval of the Malaysian
Foreign Investment Committee and the Estates Land Board. These permissions are
expected to be received within six to nine months.
Investment in Bangka project
We are also delighted to announce the signing of agreements relating to the
commencement of a project in the northern part of Bangka Island, which lies off
the south east coast of Sumatra, Indonesia. The project consists of the
acquisition and development of approximately 12,000 hectares which will be
planted with oil palms and nearby there will be a smallholders' cooperative
comprising up to a further 5,000 hectacres. A crude palm oil mill will be
constructed to process the fruit from both the project and the smallholders'
land. The site is well placed, being near a port from which palm oil can be
shipped, and is in an area with suitable rainfall and soil conditions. The
project will be managed from within the Group by a Malaysian general manager.
The investment in the project will be routed through an Indonesian company, PT
Gunung Pelawan Lestari ("GPL"), which will be owned as to 90% by the Group and
10% by the Indonesian partner, Mr Karli Boenjamin, who is an eminent Indonesian
businessman with extensive experience of oil palm developments on the island.
With regard to the financing of GPL, it is anticipated that the total funding
requirement will be in the region of US$45 million, with the peak requirement
arising in 2009. It is intended that this will be provided by a combination of
funds from within the M. P. Evans Group PLC and external loans. The plan is to
develop the project at the rate of approximately 4,000 hectares per annum and it
will be some six years from now before all of the plantings are considered
mature by which time earnings from the first plantings should have commenced.
The implementation of the project is conditional upon the necessary local
approvals but the board is confident that there should not be any difficulty in
obtaining these.
The project represents the single largest oil palm development ever undertaken,
on a majority-held basis, by the Group and it is expected that it will
substantially enhance long-term profits and cash flows.
2004 results announcement
The preliminary results for 2004 are expected to be announced on 9 May 2005.
The figures relate to the results, cash flows and net assets of the Rowe Evans
Investments PLC Group as it was at 31 December 2004 - in other words, prior to
the merger with Bertam and Lendu. The merger took place on 2 February 2005 when
the Company changed its name to M. P. Evans Group PLC and the accounts of the
enlarged group will only reflect the merger after that date.
By order of the board
J F Elliott
Secretary
27 April 2005
Enquiries:
M.P. Evans Tel: 01892 516 333
Peter Hadsley-Chaplin, Joint CEO
Philip Fletcher, Joint CEO
gcg Hudson sandler Tel : 020 7796 4133
Noémie de Andia
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