Grant of Loan Facility to Equatorial Palm Oil PLC

RNS Number : 4298J

Equatorial Palm Oil plc

16 July 2013

 



16 July 2013

EQUATORIAL PALM OIL plc

Grant of Loan Facility to Equatorial Palm Oil PLC

Equatorial Palm Oil plc ("EPO" or the "Company"), (AIM: PAL), the AIM listed palm oil development company with operations in Liberia, has entered into loan agreements (the "Loan Agreements") with Adelise Services Limited ("ASL"), a company associated with Michael Frayne, Executive Chairman of EPO, for the advance of £29,745 and US$ 425,000 to the Company (the "Loans").

Background

On 28 June 2013, EPO announced that it was seeking to raise a minimum of £2.6m to support the ongoing development of its oil palm estates (the "Proposed Fund Raising"). The Proposed Fund Raising is on-going and as at the date of this announcement the Company has received commitments of approximately £2.0 million from potential investors. The Company is confident that it will complete the Proposed Fund Raising in the near future and will make an appropriate announcement in due course.  In the meanwhile, the proceeds of the Loans will be applied towards enabling the Company to continue developing the oil palm projects in Liberia.

The Loan Agreements

Under the terms of the Loan Agreements the Company has agreed that:

·     an arrangement fee of  5 per cent. of the Loans will be payable;

·     the Loans will be repayable on the closing of the Proposed Fund Raising or within 60 days following the date of the Loan Agreements, whichever is earlier;

·     penalty interest will be chargeable on the Loans after 60 days at a rate of 2% per 30 day period thereafter if they are not repaid under the terms of the Loan Agreements;

·     warrants over 4,816,590 ordinary shares in the Company will be granted to ASL as consideration for providing the Loans. The warrants are exercisable for a period of 3 years from the date of grant at an exercise price of 10p per ordinary share.

·     ASL has agreed to convert the arrangement fee, any interest payable and $100,000 of the Loans into the Proposed Fund Raising.

As ASL is associated with Michael Frayne, the entering into of the Loan Agreements is a Related Party Transaction under the AIM Rules. Accordingly, the independent directors of EPO, being the Directors other than Michael Frayne, having consulted with the Company's Nominated Adviser, consider that the terms of the Loan Agreements are fair and reasonable insofar as the Company's shareholders are concerned.

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

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

 

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