Amendment to Concession Agreements

RNS Number : 7534Z

Equatorial Palm Oil plc

17 March 2017

 

17 March 2017                                                                                  

EQUATORIAL PALM OIL plc

("EPO" or the "Company")

Amendment to Concession Agreements

Extension of Tax and Duty Free Periods

Equatorial Palm Oil plc (AIM: PAL), the AIM listed palm oil development and production company with operations in Liberia, West Africa today updates the market that its tax and duty free allowance has been extended for a further five years under concession agreements granted to the Company's Liberian subsidiaries in 2008 for the development of two existing oil palm estates at Palm Bay and Butaw (the "Concession Agreements.").

The Concession Agreements became effective on 6 August 2008 and were for a term of 50 years. In accordance with the Concession Agreements, the Company's Liberian subsidiaries were granted certain tax and duty free status for the first 7 years of its operations ("Rehabilitation Term").

As a consequence of factors outside of the Company's control, which resulted in slower than planned development of the concession areas, the Government of Liberia ("GOL") has approved an amendment to the Concession Agreements for both of the Company's Liberian subsidiaries being Libinc Oil Palm Inc. and Liberia Forest Products Inc.

The amendments, which were ratified by the Liberian legislature and authorised by the President of Liberia, extend the Rehabilitation Term for a further 5 years from 27 February 2017 for Libinc Oil Palm Inc and 14 March 2017 for Liberia Forest Products Inc, which are the dates on which the amendments to the Concession Agreements became effective by being published into handbills. The extension of the Rehabilitation Term by 5 years has resulted in the Concession Agreements also being extended by a similar period and both shall now end on 6 August 2063 being the fifty-fifth anniversary of the effective date of the Concession Agreements.

Since 2008, the Company has spent over US$100m in developing its oil palm operations in Liberia. With crude palm oil production scheduled to commence during the second half of 2018 from our new 60 metric tonne per hour palm oil mill currently being built on Palm Bay estate, this timely extension to the Rehabilitation Term reinforces the GOL's commitment to foreign investors.

Geoffrey Brown, Executive Director of EPO, commented:

"We are extremely pleased that the GOL has approved these amendments to the Concession Agreements as it will have a huge positive impact on our operations and also benefit the communities amongst whom we operate.

The sustainable palm oil business is a long-term commitment to the GOL and its people and the Company continues with its unwavering support to reinvigorate the agricultural industry through partnering with all stakeholders."

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

Equatorial Palm Oil plc Geoffrey Brown (Executive Director)	[phone]
Strand Hanson Limited (Nominated Adviser) James Harris / James Bellman	[phone]
Mirabaud Securities LLP (Broker) Peter Krens	[phone]

Notes to editors:

Equatorial Palm Oil plc is an AIM listed crude palm oil developer and producer with palm oil estates in Liberia, West Africa.  The Company was founded in 2005 and is focused on becoming a global, sustainable producer of high quality palm oil to regional and international markets.

With a significant land position in Liberia through its operating subsidiary LPD, the Company is geographically well positioned to serve the international and regional markets and is committed to making a positive impact on the communities in which it operates through investment in local schools, health clinics, housing and infrastructure. 

The Company's largest shareholder and 50:50 joint venture partner in LPD is Kuala Lumpur Kepong Berhad ("KLK"). KLK is one of the largest palm oil producers in the world and the Company will greatly benefit from their many years of expertise in oil palm development.

 

END

 

 

AGRSFAEFMFWSEFD