Anglo-Eastern Plantations Regulatory News (AEP)

3 Dec 2007 08:57

Anglo-Eastern Plantations PLC03 December 2007 Monday 3 December 2007 ANGLO-EASTERN ACQUIRES 33,000 HA OF LAND FOR $8.3 MILLION Anglo-Eastern Plantations Plc, which owns approximately 50,000 hectares (ha) ofplantations, principally oil palm in Indonesia, has signed two contracts for theacquisition of rights over a total of 33,000 ha of land on the islands of Borneoand Bangka, both in Indonesia. The total consideration is $8.3 million in cash,from the group's existing facilities. These acquisitions will enable significantexpansion of the group over the next five to eight years Borneo - Kalimantan The first block of land rights, amounting to 26,000 ha, is owned by a localcompany, P.T. Sawit Graha Manunggal (SGM), 95% of which is to be acquired for aconsideration of $6.8 million. The balance of 5% will be retained by the vendor,an Indonesian national, who will fund his share of the development alongsideAnglo-Eastern. The location is Central Kalimantan, 6 hours' drive north of the southern coastalcity of Banjarmasin and just outside the district capital, Tamiang Layang.Accessibility by both road and river is good. Terrain and rainfall are suitable for oil palm and rubber. Vegetation ispredominately scrub, the original forest having been removed some years ago. Thearea is vacant except for isolated villages and is zoned for commercialagricultural development. Central Kalimantan is already an important plantationarea. Development of this block will begin in early 2008. A portion will be allocatedto community projects and to village claims. Production is likely to commence in2012 and the area should be fully planted by 2015. Bangka The second block of land rights, amounting to 7,000ha, is owned by another localcompany, P.T. Bangka Malindo Lestari (BML), 95% of which is being acquired for aconsideration of $1.4 million. The balance of 5% will be retained by the vendor,an Indonesian national, who will fund his share of the development alongsideAnglo-Eastern. Location is on the island of Bangka (off the south east coast of Sumatra), oneand half hours' drive south of the provincial capital of Bangka Pinang. Road andmarine access is very satisfactory. Bangka is becoming an important plantationdevelopment area. Terrain and rainfall are suitable for oil palm and rubber. Vegetation is scruband previously logged secondary forest. Again, the area is vacant save foroccasional small villages and is zoned for commercial agricultural development.Some land will be allocated for projects to support existing local communities. Development will also begin in early 2008, with a view to completion by 2012 andto first production in 2012. General Application has been made for conversion of the two local companies intoaccredited "foreign investment" companies. Conversion of land rights into confirmed land titles for both blocks will takebetween one and two years and requires development to commence in the interim. Development costs of these two projects over the next five years are estimatedat $60 million. As reported with the 2007 half year results, the group has drawndown a loan of $34.5 million which, together with self generated funds, will beused to develop these and current projects. Neither of these acquisitions will affect group profits in 2007 or 2008.Earnings should begin to be significant in 2013. Mr T H Chan, Chairman and Chief Executive, commented: "These two acquisitions will enable the significant expansion of the group inthe next five years and beyond. Their effect is to increase our total land areato 83,000ha, of which ultimately the total planted will be approximately73,000ha, compared to 38,000ha today. Enquiries: Anglo-Eastern Plantations plc 020-7236 2838Rollo Barnes (Financial Director) Bankside Consultants LimitedCharles Ponsonby 020-7367 8851 This information is provided by RNS The company news service from the London Stock Exchange