Disposal

R.E.A.Hldgs PLC
26 June 2001


R.E.A. Holdings plc ('REA' or the 'Company')

Disposal of remaining 50% interest in Deundi Tea Company Ltd ('DTC')



REA announces that it has exchanged contracts for the disposal of its
remaining 50% holding in DTC for an initial consideration of £676,000 plus
potential further earn out consideration referable to the audited post tax
profits of DTC for each financial year up to and including that to 31 December
2007.

DTC is a UK company the entire undertaking of which is represented by
operations in Bangladesh comprising three tea estates. DTC was for many years
a wholly owned subsidiary of REA but REA's interest in the issued share
capital of DTC was reduced to 50 per cent as a result of the divestment of a
half interest in DTC in March 1998.

DTC was accounted for in the group accounts of REA to 31 December 2000 as an
associated company. Its contribution to REA group profits before taxation for
that year amounted to £(1,000) and the equity interest in DTC was included in
the REA group balance sheet at 31 December 2000 at £1.1 million.

The disposal has been effected by two agreements. Pursuant to the first
agreement, REA has sold 25 per cent of DTC for a consideration of £676,000 and
has further agreed to assign loan balances owed by DTC to REA of £424,000 for
a consideration equal to the face value of those balances. The overall
consideration thus due of £1,100,000 will be payable as to £600,000 within 30
days, £250,000 on 31 December 2001 and the balance of £250,000 on a basis
relating to the receipt of cash transfers from Bangladesh into the UK, which
transfers are subject to Bangladeshi exchange controls.

Pursuant to the second agreement, REA has sold the balance of 25 per cent of
DTC for a consideration ('the earn out consideration') to be determined on a
formula basis and to be settled by one or more payments on account and a final
settlement on 30 April 2008. The amount of the earn out consideration is to be
2.5 times the average post tax profits as reported in the audited accounts of
DTC for the seven years ended 31 December 2007, of which amount 20% is to be
paid to certain key personnel involved in the management of DTC as an
incentive to them to continue to manage DTC to best advantage following the
disposal.

A payment on account of the earn out consideration will be made on each
occasion (on or prior to final settlement) upon which a cash dividend is paid
by DTC, such payment to be of an amount equal to 25 per cent of such dividend.
Upon determination of the amount of the earn out consideration (following
publication of DTC's audited accounts for 2007) any net under or overpayment
of that amount will be settled by way of the final settlement on 30 April
2008.

The purchaser has the right to elect for early settlement of the earn out
consideration; in which event, the method of calculating the amount of the
earn out consideration will be varied so as to base the calculation on the
average of the post tax profits of DTC for the seven calendar years preceding
the date of the election and the final settlement would become due 28 days
following the date of such election.

The sale proceeds received pursuant to the two transactions will be utilised
to further the REA group's strategy, as most recently stated in the listing
particulars issued on 10 April 2001, of basing the future of the group on the
oil palm project in East Kalimantan, Indonesia, of funding that project to the
maximum extent feasible by divestment of other group interests and of
minimising calls by the Company for additional equity capital.


Enquiries

Richard Robinow 020 7419 0100

Chairman


    ENDS