PAL.L Regulatory News (PAL)

28 June 2013

EQUATORIAL PALM OIL plc

("EPO" or the "Company")

PROPOSED £2.6M FUND RAISING

BUSINESS UPDATE

2012 REPORT AND ACCOUNTS UPDATE

TEMPORARY SUSPENSION OF TRADING ON AIM

Equatorial Palm Oil plc, (AIM: PAL), the AIM listed palm oil development and production company with operations in Liberia, West Africa announces that it is seeking to raise a minimum of £2.6m to support the ongoing development of its oil palm estates ("Fund Raising").

The Company will be undertaking a book build through its broker Mirabaud Securities and has received conditional offers from existing shareholders of up to £1.7m. Accordingly, the Company is seeking from new and existing shareholders an amount of at least £0.9m.

Business Update

The work being carried out by Ore Search Civil Liberia Ltd ("OSC"), an international earth moving contractor, to assist in land preparation at Palm Bay estate is progressing extremely well. In this calendar year to date the Company has planted over 1,000 hectares of oil palms at both Palm Bay and Butaw estates. The appointment of OSC has significantly helped the Company to achieve its strategic objectives through expanding the nurseries and land preparation efforts in order to deliver on the large scale planting programme. 

Environmental studies at Palm Bay complete

Environmental reports for Palm Bay Estate have been submitted to EPO's 50 per cent. owned joint venture company, Liberian Palm Developments Limited ("LPD"), in final form by Coastal & Environmental Services, the South African internationally accredited environmental consultants. This is a key milestone for the Company, being the culmination of over 2 years of work.

The environmental studies concluded, inter alia, that the oil palm development at the Palm Bay estate is acceptable from an environmental and social perspective, and will result in sustainable benefits to the area.

African Export-Import Bank ("Afreximbank") was appointed as a corporate advisory partner to LPD as announced on 13 February 2013 to put in place the anticipated long term debt funding of $140m ("the Facility"). The completion of these environmental reports will now enable Afreximbank to engage with a number of development finance institutions ("DFIs") in relation to the Facility. Afreximbank will be arranging site visits to Liberia with the DFIs in the coming weeks.

Background to and reasons for the Fund Raising

In December 2010, the Company entered into and announced a joint venture with Biopalm Energy Limited ("Biopalm"), a subsidiary of the SIVA Group, an Indian conglomerate. As agreed under the terms of the joint venture agreement dated 10 December 2010 entered into between Biopalm and EPO (the "JV Agreement"), EPO, in February 2011, transferred its oil palm assets in Liberia together with US$7.5m to LPD and Biopalm transferred US$22.5 million to LPD. Under the JV Agreement, Biopalm agreed to provide a guarantee (the "Guarantee") against external funding raised by LPD up to US$30m (the "External Funding"). It was agreed that in the event that the External Funding is not arranged Biopalm shall contribute any amounts required by LPD up to US$30m as debt on commercial terms. To date this External Funding has not been provided.

EPO and Biopalm are in discussions for the provision of funds or the giving of the Guarantee by Biopalm in accordance with its obligations under the JV Agreement.

In the meantime the Company is seeking funds from new and existing shareholders to support the Liberian operations. This fund raise may also be open to a limited number of retail investors if practicable to do so.

Report and Accounts Update

On the basis that the fund raise is in progress the Company has not been able to finalise the Report and Accounts for year ended 31 December 2012.

Accordingly, the Company's securities will be temporarily suspended from 28 June 2013 at 12 noon, pending publication of the Company's Report and Accounts for 2012.

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For further information, please visit www.epoil.co.uk or contact:

Notes to editors:

Equatorial Palm Oil plc (EPO) is an AIM listed crude palm oil (CPO) producer with palm oil estates in Liberia, West Africa. The Company was founded in 2005 and is focused on becoming a global, sustainable producer of high quality palm oil to regional and international markets.

With significant land position in Liberia, EPO is geographically well positioned to serve the international and regional markets and is committed to making a positive impact on the community through investment in local schools, health clinics, housing and infrastructure.

The Company's 50:50 joint venture partner in LPD is Biopalm Energy Ltd, a subsidiary of the Siva Group, which invests in oil palm projects around the world.