Anglo-Eastern Plantations Regulatory News (AEP)

10 Jan 2008 07:00

Anglo-Eastern Plantations PLC10 January 2008 Thursday 10 January 2008 ANGLO-EASTERN ACQUIRES A FURTHER 15,000 HA OF LAND FOR $3.8 MILLION Anglo-Eastern Plantations Plc (AEP.L), which owns approximately 83,000 hectares(ha) of plantation land, of which 38,000ha are currently planted, principallywith oil palm in Indonesia, has acquired the rights over 15,000 ha of land inthe province of Bengkulu in southern Sumatra in Indonesia. The totalconsideration is $3.8 million in cash, from the group's existing facilities. This acquisition follows the two announced on 3 December 2007, totalling33,000ha on the islands of Bangka and Borneo, bringing total acquisitions to48,000ha in the last two months and enabling the significant expansion of thegroup over the next five to eight years. The Bengkulu land rights are owned by a local company, P.T. Riau Agrindo Agung(RAA), 95% of which is to be acquired for a consideration of $3.8 million. Thebalance of 5% will be retained by the vendor, an Indonesian national, who isalso Anglo-Eastern's partner in Kalimantan (Indonesian Borneo) and who will fundhis share of the development alongside Anglo-Eastern. The location is about two hours' drive south of the group's existing estates inBengkulu and about one hour's drive north of the provincial capital. The projectwill therefore be a natural management addition to the group's existingoperations in the region and, at least in early production years, will haveaccess to the group's existing nearby mill. Terrain is hilly, but better than that of the existing Bengkulu operations.Soils are good and rainfall is also suitable for oil palm. Vegetation ispredominately scrub, and light secondary forest, the original forest having beenremoved some years ago. The area is vacant except for some villages and is zonedfor commercial agricultural development. At present, it is not possible toestimate accurately the proportion of the area which will be allocated to localcommunity projects, but a substantial portion of the area will be available forplanting by the group. Limited planting will begin in 2008, using material from the group's existingnurseries in the region, and significant planting will commence in 2009.Production is likely to commence in 2012 and the area should be fully planted by2015. Application has been made for conversion of the local company into an accredited"foreign investment" company. Conversion of the land rights into confirmed land titles will take between oneand two years and requires development to commence in the interim. Field development cost of, say, a 10,000ha project over the next five years isestimated at $32 million. As reported with the 2007 half year results, the grouphas drawn down a loan of $34.5 million which, together with self generatedfunds, will be used to develop this and other current projects. Net cash at 30June 2007 totalled $9.0 million. This acquisition will not affect group profits in 2008. Earnings should begin tobe significant in 2013. Mr T H Chan, Chairman and Chief Executive, commented: "This further acquisition is a valuable addition to the group's existingoperations in Bengkulu and adds to our already substantial land bank, which willenable the significant expansion of the group in the next five years and beyond.The effect is to increase our total land area to 98,000ha." Enquiries: Anglo-Eastern Plantations plc 020-7236 2838Rollo Barnes (Financial Director) Bankside Consultants LimitedCharles Ponsonby 020-7367 8851 Notes for Editors 1. Anglo-Eastern is a member of the Round Table on Sustainable Palm Oil (RSPO), whose members comprise palm oil growers and refiners, food manufacturers and supermarkets as well as NGOs interested in environmental protection and the rights of indigenous people. RSPO sets best practice standards for the sustainable production of palm oil. 2. At last night's closing mid-market share price of 550p, Anglo-Eastern's market capitalisation was £217 million. This information is provided by RNS The company news service from the London Stock Exchange