Update re certain matters

R.E.A. Holdings plc (RE.) R.E.A. Holdings plc: Update re certain matters 07-Dec-2020 / 12:08 GMT/BST Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group. The issuer is solely responsible for the content of this announcement. R.E.A. Holdings plc ("REA") Update re certain matters Selling prices Since May 2020, the price of crude palm oil ("CPO"), CIF Rotterdam, has risen from a low of $510 per tonne to a current price of $920 per tonne.  Whilst the higher prices now prevailing are materially beneficial to REA, the extent of the benefit is reduced by two imposts chargeable on exports of Indonesian CPO: export duty and export levy. Export duty is a tax payable to the Indonesian government.  Export levy is payable to a dedicated fund which utilises levy income to subsidise the manufacture of biodiesel from CPO and to support other measures designed to benefit the growing of oil palms in Indonesia.  According to Oil World, Indonesian biodiesel will consume approaching 8 million tonnes of CPO in 2020 and the Indonesian government has stated that it is committed to increasing the mandatory usage of biodiesel in transport fuel.  Because biodiesel is a substitute for petroleum based diesel oil, it has to be priced on a basis that reflects prevailing levels of petroleum oil prices.  As a result, at current CPO prices, the manufacture of biodiesel would be uneconomic without the subsidy funded by the export levy. Both export duty and export levy are calculated on sliding scales by reference to a CPO reference price that is set periodically by the Indonesian government on the basis of CIF Rotterdam and other recognised benchmark CPO prices.  Following the rise in the CPO price referred to above, the Indonesian government has recently announced changes to the export levy scale.  As a result, the combined incidence of export duty and export levy at different CPO reference prices is as shown by the table annexed to this announcement.  The current CPO reference price is $870.77. CPO produced by REA is generally sold in the Indonesian local market.  As such, group sales are not subject to export duty or export levy.  However, arbitrage between the Indonesian local and international CPO markets normally results in a local price that is broadly in line with prevailing international prices after adjustment of the latter for delivery costs and export duty and levy. Bank financing Agreement has recently been reached with the group's Indonesian bankers on extension for a further year of the group's working capital facility, equivalent to some $5 million, which fell due for renewal in November 2020.  Discussions are continuing as to possible additions to the group's term loan facilities to fund, in part, nearer term repayments due in respect of those facilities. Claims against coal interest As previously reported, PT Indo Pancadasa Agrotama ("IPA"), an Indonesian company owning a coal concession near Kota Bangun in East Kalimantan, to which REA has extended funding, has been the object of certain arbitration claims by two claimants (connected with each other) with whom IPA previously had conditional agreements relating to the development and operation of IPA's coal concession.  REA was joined as a party to the arbitration on a prima facie basis and without prejudice to any final determination of jurisdiction.  Further separate, but related, potential claims threatened by the two claimants in respect of, inter alia, alleged tortious conduct by REA's subsidiary, R.E.A. Services Limited, and its managing director were stayed pending a conclusion of the arbitration hearing.  Following a virtual merits hearing of the arbitration claims at the end of June 2020, the arbitral tribunal has dismissed all claims in the arbitration against IPA and REA and has awarded costs on an indemnity basis to IPA.  The tribunal's decision removes the grounds for the separate stayed claims in respect of tortious conduct. Trading update REA plans to issue an update on 2020 trading early in 2021. Enquiries: R.E.A. Holdings plc Tel: [phone] ANNEXURE COMBINED EXPORT LEVY AND EXPORT DUTY From To  Levy  Duty  Total Net price* $ $  $  $  $  $ 0 670 55  - 55 615 670 695 60  - 60 635 695 720 75  - 75 645 720 745 90  - 90 655 745 750 105  - 105 645 751 770 105 3 108 662 770 795 120 3 123 672 795 800 135 3 138 662 801 820 135 18 153 667 820 845 150 18 168 677 845 850 165 18 183 667 851 870 165 33 198 672 870 895 180 33 213 682 895 900 195 33 228 672 901 920 195 52 247 673 920 945 210 52 262 683 945 950 225 52 277 673 951 970 225 74 299 671 970 995 240 74 314 681 995 1000 255 74 329 671 1001 1050 255 93 348 702 1051 1100 255 116 371 729 1101 1150 255 144 399 751 1151 1200 255 166 421 779 1201 1250 255 183 438 812 1251 1300 255 200 455 845 *At top of band

ISIN:	GB0002349065
Category Code:	MSCM
TIDM:	RE.
LEI Code:	213800YXL94R94RYG150
Sequence No.:	89166
EQS News ID:	1153247

End of Announcement	EQS News Service