Panther Metals Regulatory News (PALM)

30 Nov 2009 07:00

RNS Number : 2471D Asian Plantations Limited 30 November 2009 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTOTHE 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 incorporatedcompany established to act as a holding company with subsidiaries (together the "Group")involved in the acquisition, development, operation and management of palm oil plantationsin Malaysia, is pleased to announce its admission to the AIM market of the LondonStock Exchange ("Admission") and the first day of dealings in its ordinary sharesunder ticker symbol PALM. The Company has raised £5.26 million through a Company sponsored placing of 7,010,000new 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 Admissionwith Mirabaud Securities LLP as broker. Overview The Group owns 4,795 hectares of titled and agricultural land, zoned for palm oilplantations in Sarawak, Malaysia (the "Sarawak Estate"). To date, the Group hasspent approximately RM42 million (US$12.43 million) in respect of the acquisitionand development of the Sarawak Estate. Following the arrival of the first seedlings at the nursery in April 2008 and thefirst 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 Estateplanted and developed by the end of 2009, with the expectation of revenue-generatingharvests 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 wouldincrease 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 Admissionand to pursue further opportunities to increase the plantable area to in excess of20,000 hectares within two years of Admission. Key investment opportunity There is a significant valuation gap, on a per hectare basis, between the cash costof land acquisition and development of palm oil plantations and the market valuationsfor mature businesses. The Directors believe mature palm oil plantations offer attractivecash flow generation, from which the Group is well positioned to benefit. The Directors believe the following characteristics of the Group are attractive toinvestors: an opportunity to invest in a developing Malaysian palm oil platform at a substantialdiscount to mature land valuations for similar publicly listed companies; the implicit valuation per plantable hectare of land held by the Group at the timeof Admission is RM23,311 (US$6,900). Institutional market research estimates thevalue of the plantation business of comparable Malaysian palm oil companies at betweenRM65,000 to RM100,000 (US$20,000 to US$30,000) per hectare; the Directors have substantial experience in the palm oil industry, including thesuccessful pioneering of advanced milling technologies for the processing of freshfruit bunches ("FFB"), planting a top-rated palm oil estate in Malaysia and undertakingnew planting projects; palm oil is increasingly in demand, driven, in part, by its relative low cost ofproduction compared to other major vegetable oils and health benefits when comparedto alternative edible oils; the palm oil market is undergoing a period of rapid change, with the growth of newbiofuel markets resulting in a distinct increase in demand for vegetable oil products,and a commensurate increase in global palm oil prices. The Directors believe thatthere is potential for prices to rise further; the Group has access to land in Malaysia on which palm oil trees have already beenplanted, at a time of increasing competition for agricultural land; the Group has committed to comply with the environmental guidelines relating to sustainablepalm oil planting practices. The Directors and major shareholders of the Group haveexperience with the Roundtable on Sustainable Palm Oil ("RSPO") application processand the Group is currently seeking to become a member of the RSPO. In addition toacting in accordance with the RSPO membership guidelines, the Directors intend toobserve guidance from other environmental organisations or groups which the Directorsbelieve 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 technologyhas 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 vegetableoil production over the next ten years. With strong growth in China and India, combinedwith health concerns surrounding trans-fatty acids in the developed markets, theoutlook for the Group is exciting. The listing on AIM provides an opportunity forinvestors to benefit from these key drivers, while investing in the sector at a significantdiscount to its established peers. With the first FFB harvest expected within 12 months and further potential land acquisitionopportunities available, the Group is well positioned to become a significant producerof 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 yearsat Keresa Plantations, where he remains the managing director, over which time heplanted and managed a 6,000 hectare palm oil plantation. He is a specialist in plantationplanting, palm species and plantation operations with over 10 years' experiencein the industry. He also founded Keresa Mills Sdn Bhd, which has been a pioneer inthe 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, MrMelka was a private venture capitalist and has founded companies in Southeast Asiafocused on limited service lodging, sustainable tree plantations and financial services.From 1995 to 2005, he worked in Credit Suisse First Boston's investment bankinggroup. 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 andlegal sectors. He has served in a variety of political roles in Malaysia, includingMinister in the Sarawak State Cabinet, Member of Parliament, appointee to the parliamentaryPublic Accounts Committee and until recently, Secretary General of Parti Pesaka BumiputraBersatu Sarawak. This information is provided by RNS The company news service from the London Stock Exchange