Proposed equity issues

R.E.A.Hldgs PLC
31 January 2006


R.E.A. Holdings plc ('REA')
Proposed equity issues

As previously announced, on 23 January 2006, REA and certain of its subsidiaries
and directors entered into an agreement (the 'settlement agreement') with Mr M E
Zukerman and connected parties for the settlement of the outstanding actual and
threatened litigation claims between them and for the acquisition by REA of all
of the issued shares of its subsidiary, Makassar Investments Limited, not
already owned by it.

REA has concluded that it should seek additional equity capital. To this end,
two transactions are in contemplation: first, a limited placing of new ordinary
shares and, second, an open offer of new ordinary shares combined with a further
placing of such shares.

Pursuant to the first of these transactions, it is proposed to place with a
limited number of institutional investors, subject to certain conditions, up to
1,372,000 new ordinary shares (the 'first transaction shares') at a placing
price of 260p per share so as to raise some £3.6 million (before expenses). The
placing of the first transaction shares would be conditional upon completion of
the settlement agreement and upon admission of the first transaction shares to
the Official List of the Financial Services Authority and to trading on the
London Stock Exchange's market for listed securities. The first transaction
shares would be allotted under authorities granted to the directors of REA by
resolution of REA shareholders passed at the annual general meeting of REA held
on 15 June 2005. The first transaction shares would rank pari passu with, and
form a single issue with, the ordinary shares of REA that are already in issue.

The principal purpose of this first transaction would be to raise a sterling
amount approximately equivalent to $6 million so as to replace the group cash
resources expended in funding the $6 million cash payment to be made by a
subsidiary of REA pursuant to the settlement agreement.

Pursuant to the second of the transactions referred to above, it is proposed
that between 2.1 million and 2.6 million further new ordinary shares (the
'second transaction shares') should be issued for cash at a price of 260p per
share so as to raise between £5.5 million and £6.8 million before expenses. It
is envisaged that the issue of the second transaction shares would be effected
by an open offer of new ordinary shares to holders of existing ordinary shares
and warrants combined with a further placing of new ordinary shares with
institutional investors. A proportion of the second transaction shares comprised
in the placing component of the issue would be subject to clawback if
applications for second transaction shares pursuant to the open offer exceeded a
certain minimum level to be agreed. The second transaction shares would, if and
when issued, rank pari passu with, and form a single issue with, the ordinary
shares of REA that are then in issue.

The issue of the second transaction shares would be conditional upon completion
of the settlement agreement, obtaining necessary ordinary shareholder approvals
and admission of the second transaction shares to the Official List of the
Financial Services Authority and to trading on the London Stock Exchange's
market for listed securities.

It would be intended that the net proceeds of the issue of the second
transaction shares be applied in financing the continuing development of the
group's oil palm operations which, if other circumstances (including operational
logistics and the level of future CPO prices) permit, may to some extent be
accelerated. The issue of the first and second transaction shares would also
increase REA's equity base and thus counterbalance the increased debt burden
that will result from the issue of a further $19 million nominal of 7.5 per cent
dollar notes 2012/14 of REA pursuant to the settlement agreement.

The proposed issues of both the first transaction shares and the second
transaction shares are dependent upon procurement of placees willing to
subscribe all of the first transaction shares and a substantial proportion of
the second transaction shares. Discussions with institutional investors arranged
through Mirabaud Securities Limited have resulted in indications of interest at
the required levels but no binding commitments have as yet been signed.
Implementation of the proposed issue of the second transaction shares will
require preparation and despatch of the necessary formal documentation including
the issue of a prospectus incorporating a circular to shareholders.



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