Default notice issued to Biopalm Energy Limited

RNS Number : 8059I

Equatorial Palm Oil plc

08 July 2013

 



8 July 2013

EQUATORIAL PALM OIL plc

("EPO" or the "Company")

EPO issues default notice to Biopalm Energy Limited

The board of EPO (the "Board") announces that it has today issued a written notice to its joint venture partner, Biopalm Energy Limited ("Biopalm") (a wholly owned subsidiary of Indian conglomerate, the Siva Group) setting out that Biopalm is in material breach of its obligations under the investment agreement signed between the parties on 10 December 2010 (the "Investment Agreement").

Biopalm is required under the Investment Agreement to arrange and/or contribute, either directly or through any member of its group, any external funding required by the joint venture company, Liberian Palm Developments Limited ("LPD")  (up to a maximum of US$30,000,000) (the "Commitment").

Notwithstanding Biopalm's obligations to fund LPD up to the Commitment amount, EPO intends to continue to fund LPD and its assets in the Republic of Liberia. EPO has, however, advised Biopalm that any dilution of shareholding that results from raising equity in EPO, due to Biopalm's failure to honour its Commitment, should, in EPO's view, result in a corresponding increase in EPO's share in LPD, which is, at present, held 50/50 by EPO and Biopalm as well as an award for damages for loss due to Biopalm's failure to honour its commitments under the Investment Agreement.

EPO continues to negotiate and work with Biopalm regarding the Commitment with a view to an amicable solution being reached, but has reserved all rights to take action against Biopalm under the Investment Agreement.

EPO shall make further announcements regarding the above, and its continued discussions with Biopalm, in due course.

- Ends -

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

Equatorial Palm Oil plc Michael Frayne (Executive Chairman)	[phone]
Strand Hanson Limited (Nominated Adviser) James Harris	[phone]
Mirabaud Securities LLP (Broker) Peter Krens	[phone]
Pelham Bell Pottinger (Financial / Corporate PR) Charlie Vivian  / Joanna Boon	[phone]

 

END

 

 

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