Panther Metals Regulatory News (PALM)

16 August 2010

Asian Plantations Limited

("APL" or the "Company")

Subscription,

Proposed acquisition of Fortune Plantations

 and

Holding in Company

Subscription

Asian Plantations Limited (LSE: PALM), a palm oil plantation company with operations in Malaysia, is pleased to announce that the Company has entered into subscription agreements with a number of institutional investors for a total of 3,868,083 new ordinary shares of no par value ("Ordinary Shares") of the Company (the "Subscription Shares") at a subscription price of 110 pence per share (the "Subscription"). The Subscription will raise £4.25 million (circa. US$6.6 million), gross of expenses. The Subscription price represents a 46.7 per cent. premium to the Company's placing price of 75 pence per share at admission to trading on AIM on 30 November 2009.

The Company intends to use the proceeds from the Subscription to complete the conditional acquisition of Fortune Plantation Sdn. Bhd ("Fortune"), which is described in detail below, and for general working capital purposes.

The Subscription Shares will rank pari passu with all existing Ordinary Shares, and application will be made for the Subscription Shares to be admitted to trading on AIM ("Admission"). Admission is expected to take place on 19 August 2010, following which the enlarged issued share capital of the Company will total 33,444,752 Ordinary Shares. The Company does not hold any shares in treasury.

Proposed acquisition of Fortune Plantation

The Company is pleased to further announce that it has entered into a conditional agreement to acquire the entire issued share capital of Fortune (the "Proposed Acquisition"), which owns a partly developed palm oil plantation totalling approximately 5,000 hectares in Sarawak, Malaysia (the "Fortune Estate").

The total consideration for the Proposed Acquisition, which is subject to a number of conditions, is RM38.7 million (circa. US$12.2 million) and is payable in two tranches. The initial non-refundable tranche of RM3.9 million (circa. US$1.2 million) is payable immediately and a further tranche of RM34.8 million (circa. US$11.0 million) is to be paid within 90 days. The total gross purchase price per hectare is approximately RM7,737 (circa. US$2,440). Adjusted for land development works already completed on the Fortune Estate, which effectively reduce future development capital expenditures, the purchase price per hectare is approximately RM6,249 (circa. US$1,971).

It is anticipated that the Proposed Acquisition will be completed within a period of 90 days and the consideration is to be funded with RM24.7 million (circa. US$7.8 million) from a new nine year debt facility, provided by a local bank in Malaysia, and RM13.9 million (circa. US$4.4 million) from the net proceeds of the Subscription. The directors of APL (the "Board") are confident that all conditions associated with the Proposed Acquisition will be satisfied but, in the unlikely event that the Proposed Acquisition does not complete, the net proceeds of the Subscription will be used for general working capital purposes. 

Information on Fortune

The Fortune Estate is less than five kilometres from APL's existing palm oil plantations and consists of 5,000 hectares of agriculturally titled land. Over 1,000 hectares of this land bank has been cleared and prepared for planting thereby reducing the Company's required development spend in 2011. Nursery operations are expected to commence in October 2010, thereby enabling in-the-ground planting to begin in the final quarter of 2011. The Company expects, subject to the availability of sufficient working capital, to fully complete all the in-the-ground planting by the end of 2013.

The audited accounts of Fortune for the year ended 30 June 2009, which have been prepared under Malaysian GAAP, showed revenues of RM16,010 (circa. US$5,049) and net losses of RM469,973 (circa. US$148,204). Gross assets as at 30 June 2009 totalled RM17.8 million (circa. US$5.6 million).

The Board believes that the Proposed Acquisition offers numerous strategic benefits to APL, including, inter alia, the following:

·; increasing the scale of the Company's existing operations to approximately 15,645 hectares of plantation land, which is in line with the Company's stated objective of exceeding 20,000 hectares within two years of admission to trading on AIM; and

·; providing the Company with the additional scale needed to seek to meaningfully increase the size of its milling complex, currently under planning development, to an initial 90 tonnes per hour and upgradeable to 120 tonnes per hour. A larger milling operation enables improved economies of scale and allows for better competitive positioning for the processing of third party crop.

In addition, the Board believes that the Company has secured an attractive valuation of the Fortune Estate, relative to other publicly announced land transactions in East Malaysia, at a time of increasing scarcity of agricultural land in Malaysia.

Holding in Company

Steadfast Financial L.P. ("Steadfast") is participating in the Subscription by subscribing for 2,860,000 Subscription Shares. Following Admission, Steadfast, through its investment funds, will collectively hold 7,660,000 Ordinary Shares, representing 22.9 per cent. of the enlarged issued share capital of the Company. Due to the size of Steadfast's existing shareholding in the Company of 16.2 per cent., the participation of Steadfast in the Subscription is considered to be a related party transaction under the AIM Rules for Companies. Accordingly, the Board considers, having consulted with Strand Hanson Limited, that the terms of the Subscription are fair and reasonable insofar as the Company's shareholders are concerned.

Graeme Brown, APL's Joint Chief Executive Officer, commenting on the Proposed Acquisition, said:

"The acquisition of the Fortune Estate is a transformational development for the Company. We now have a projected fresh fruit bunch ("FFB") output which justifies a significant increase to the scale of our milling complex to 90 tonnes per hour, upgradeable to 120 tonnes per hour. We expect our mill to be operational in 2012. It will incorporate proven vertical sterilizer technology and environmentally friendly processing technologies, such as methane recapture.

In addition, our combined estates are now larger than that of several long-standing plantation companies that are publicly traded in Malaysia and Singapore. We are on track to fully complete the plantings of our first 4,795 hectare estate by year-end 2011 and remain confident that we can achieve the Company's stated objective of owning in excess of 20,000 hectares within two years of listing."

Dennis Melka, APL's Joint Chief Executive Officer, commenting on the Proposed Acquisition, said:

"We are delighted to have received such significant demand for our Subscription from existing and new institutional shareholders. The new funds raised further strengthen the Company as it continues its strategy of consolidating scarce agriculturally-titled land parcels in Malaysia.

The Fortune Estate was acquired in a non-competitive process, driven by the Board's local relationships, and at an attractive valuation per hectare, being within 5 per cent. of the value the Company paid for its original estate acquisition in 2007. Particularly given the numerous recent announcements by global and regional oilseed processing players seeking upward, vertical integration into the Southeast Asian plantation sector, we are of the opinion that the Board's strategy to create a leading Malaysian focused plantation company has and will continue to create shareholder value.

The next 12 months are an exciting time for the Company, as we initiate harvesting on our fields planted in 2009 and continue our land consolidation strategy. We are also confident that we will be in a position to complete the vast majority of our plantings over the next 18 months and we wish to thank all our shareholders for their continued support as we work towards bringing our estates to full maturity."

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