Admission to AIM & First Day
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN
news release
30 November 2009
ASIAN PLANTATIONS LIMITED
FIRST DAY DEALINGS
The Board of Asian Plantations Limited (the "Company"), a Singapore incorporated company established to act as a holding company with subsidiaries (together the "Group") involved in the acquisition, development, operation and management of palm oil plantations in Malaysia, is pleased to announce its admission to the AIM market of the London Stock Exchange ("Admission") and the first day of dealings in its ordinary shares under ticker symbol PALM.
The Company has raised £5.26 million through a Company sponsored placing of 7,010,000 new ordinary shares representing 23.7% of the enlarged share capital of the Company. The approximate market capitalisation of the Company at the subscription price is £22.18 million.
Strand Hanson Limited is acting as nominated adviser in relation to the Admission with Mirabaud Securities LLP as broker.
Overview
The Group owns 4,795 hectares of titled and agricultural land, zoned for palm oil plantations in Sarawak, Malaysia (the "Sarawak Estate"). To date, the Group has spent approximately RM42 million (US$12.43 million) in respect of the acquisition and development of the Sarawak Estate.
Following the arrival of the first seedlings at the nursery in April 2008 and the first planting of palm oil trees in April 2009, the directors of the Company (the "Directors") expect to have approximately 2,000 hectares of the total Sarawak Estate planted and developed by the end of 2009, with the expectation of revenue-generating harvests commencing in December 2010.
In addition to the continued development and future operation of the Sarawak Estate, the Group has identified a number of potential acquisition opportunities which would increase the amount of land held for the development and operation of palm oil plantations. The Directors intend to complete at least one acquisition within six months of Admission and to pursue further opportunities to increase the plantable area to in excess of 20,000 hectares within two years of Admission.
Key investment opportunity
There is a significant valuation gap, on a per hectare basis, between the cash cost of land acquisition and development of palm oil plantations and the market valuations for mature businesses. The Directors believe mature palm oil plantations offer attractive cash flow generation, from which the Group is well positioned to benefit.
The Directors believe the following characteristics of the Group are attractive to investors:
-
an opportunity to invest in a developing Malaysian palm oil platform at a substantial discount to mature land valuations for similar publicly listed companies;
-
the implicit valuation per plantable hectare of land held by the Group at the time of Admission is RM23,311 (US$6,900). Institutional market research estimates the value of the plantation business of comparable Malaysian palm oil companies at between RM65,000 to RM100,000 (US$20,000 to US$30,000) per hectare;
- the Directors have substantial experience in the palm oil industry, including the successful pioneering of advanced milling technologies for the processing of fresh fruit bunches ("FFB"), planting a top-rated palm oil estate in Malaysia and undertaking new planting projects;
- palm oil is increasingly in demand, driven, in part, by its relative low cost of production compared to other major vegetable oils and health benefits when compared to alternative edible oils;
- the palm oil market is undergoing a period of rapid change, with the growth of new biofuel markets resulting in a distinct increase in demand for vegetable oil products, and a commensurate increase in global palm oil prices. The Directors believe that there is potential for prices to rise further;
- the Group has access to land in Malaysia on which palm oil trees have already been planted, at a time of increasing competition for agricultural land;
- the Group has committed to comply with the environmental guidelines relating to sustainable palm oil planting practices. The Directors and major shareholders of the Group have experience with the Roundtable on Sustainable Palm Oil ("RSPO") application process and the Group is currently seeking to become a member of the RSPO. In addition to acting in accordance with the RSPO membership guidelines, the Directors intend to observe guidance from other environmental organisations or groups which the Directors believe promote the growth, trade in and use of sustainable palm oil; and
- the Group intends to investigate the process of developing its own crushing mill, into which the Directors would incorporate methane recapture technologies. This technology has been tested and is eligible for carbon credits under the Kyoto protocol.
Commenting on Admission, Graeme Brown, Joint Chief Executive Officer, said:
"Palm oil is expected to provide up to two-thirds of the growth in worldwide vegetable oil production over the next ten years. With strong growth in China and India, combined with health concerns surrounding trans-fatty acids in the developed markets, the outlook for the Group is exciting. The listing on AIM provides an opportunity for investors to benefit from these key drivers, while investing in the sector at a significant discount to its established peers.
With the first FFB harvest expected within 12 months and further potential land acquisition opportunities available, the Group is well positioned to become a significant producer of palm oil in the short to medium term."
Further information on the Company can be found at www.asianplantationslimited.com.
Enquiries to:
Asian Plantations Limited Tel: +65 9878 4171
Dennis Melka
Strand Hanson Limited Tel: +44 20 7409 3494
James Harris
Angela Peace
Paul Cocker
Mirabaud Securities LLP Tel: +44 20 7878 3360
Rory Scott
Bankside Consultants Tel: +44 20 7367 8888
Simon Rothschild
Oliver Winters
NOTE TO EDITORS:
Directors
Executive Directors
Graeme Brown, Co-Founder & Joint Chief Executive Officer, age 38
Graeme Brown is co-founder of the Company. Prior to this, he worked for eight years at Keresa Plantations, where he remains the managing director, over which time he planted and managed a 6,000 hectare palm oil plantation. He is a specialist in plantation planting, palm species and plantation operations with over 10 years' experience in the industry. He also founded Keresa Mills Sdn Bhd, which has been a pioneer in the successful implementation of advanced milling technologies for FFB processing.
Dennis Melka, Co-Founder & Joint Chief Executive Officer, age 36
Dennis Melka is also co-founder of the Company. Prior to this, and since 2005, Mr Melka was a private venture capitalist and has founded companies in Southeast Asia focused on limited service lodging, sustainable tree plantations and financial services. From 1995 to 2005, he worked in Credit Suisse First Boston's investment banking group.
Non-executive Director
Datuk Amar Leonard Linggi Jugah, Non-Executive Chairman, age 69
Datuk Amar Leonard Linggi Jugah has over 36 years' experience in the business and legal sectors. He has served in a variety of political roles in Malaysia, including Minister in the Sarawak State Cabinet, Member of Parliament, appointee to the parliamentary Public Accounts Committee and until recently, Secretary General of Parti Pesaka Bumiputra Bersatu Sarawak.
This information is provided by RNS
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