Issue of Equity

R.E.A.Hldgs PLC
20 February 2003

Summary

R.E.A. Holdings plc ('the company') announces proposals to raise not less than
£2.0 million and up to a maximum of £3.9 million (in each case net of expenses)
by way of a placing and open offer resulting in the issue of not less than
3,138,245 (and up to a maximum of 5,736,957) new ordinary shares of 25p each in
the capital of the company, to be issued fully paid at a subscription price of
73p per share.



A circular ('the circular') providing information regarding the proposals is
expected to be despatched later today to shareholders and holders of the
company's warrants and convertible stock.  As implementation of the placing and
open offer will require certain shareholder authorities, the circular will
include a notice convening an extraordinary general meeting of the company for
10.00 am on 17 March 2003 for the purposes of considering and, if thought fit,
approving a special resolution to provide the required authorities.



Background

Following the divestment, over recent years, of former operating activities, the
East Kalimantan project now represents the entire business of the group.  The
project is now nearing the end of its initial development phase and has become
an established business.



The initial development phase spanned a period of over twelve years from the
East Kalimantan project's inception in 1989.  Throughout that period, the
project required funding.  During the early years of the project, the
procurement of the necessary funding proved relatively straightforward.  Equity
and mezzanine finance were supplied by the company and other investors through
Makassar (the parent company of REA Kaltim, the direct owner of the project) and
these were augmented with bank finance raised locally in Indonesia.  However,
the 1997 economic destabilisation of many parts of South East Asia and the
subsequent political destabilisation in Indonesia caused much of the Indonesian
banking industry to become insolvent.  This meant that, for a time, it was
virtually impossible to raise debt finance for investment in Indonesia from
conventional financing sources and the project was forced to rely on equity and
equity related funding.



Much of such funding was provided by, or with financial support from, the
company and the MEZ group (an equity investor in Makassar with a shareholding
formerly equal to that of the company).  However, towards the end of 2000 and
running into the first half of 2001, the continuing need for capital to fund the
East Kalimantan project was accompanied by the negative trading factors of a
slower than expected build up in crops from the project and a fall in crude palm
oil prices to a low of under $250 per tonne.  Concurrently, difficulties
developed in the relationship between the company and the MEZ group.  Efforts
were made to reconcile the differences that had arisen, including an agreement
in February 2001 that REA Kaltim should suspend all debt service and seek more
favourable terms from its lenders, but those efforts failed.



Following such failure, in October 2001, on the requisition of the company,
additional directors were appointed to the board of directors of Makassar such
that a majority of that board comprised directors of the company.  Just ahead of
that appointment, but after notice of the necessary extraordinary general
meeting of Makassar had been served on shareholders of Makassar, the MEZ group
initiated legal proceedings in New York against the company and two of its
directors, Richard Robinow and John Oakley.



Since those developments, the company has concentrated first and foremost on
assuring the solvency and future prospects of Makassar and REA Kaltim.  To that
end, in April 2002, the company acquired the whole of the issued ordinary share
capital of MP which, immediately prior to its acquisition by the company, had
acquired all of the issued shares of Makassar other than those owned by the
company and the MEZ group.  This resulted in the company controlling 51 per cent
of the issued ordinary share capital and 73 per cent of the issued voting share
capital of Makassar.  Concurrently with the acquisition of MP, the company made
an underwritten open offer of 4 per cent convertible loan stock 2012 to then
holders of its issued ordinary shares and warrants so as to raise, on completion
of that offer in May 2002, the sum of £3.8 million (before expenses).



With the monies raised from the April 2002 open offer, the company and MP
supported a rights issue by Makassar.  The MEZ group did not take up its rights
pursuant to the rights issue.  In consequence, the combined interests of the
company and MP in the capital of Makassar increased to their current levels of
79 per cent of the issued ordinary share capital and 84 per cent of the issued
voting share capital.  Makassar then applied the monies raised by its rights
issue in supporting REA Kaltim.  This has permitted REA Kaltim to complete
restructuring negotiations with its Indonesian bankers leading to the recent
signature of formal rescheduling agreements with a sufficient number of the
bankers to ensure that no event of default can now be declared in respect of the
REA Kaltim Indonesian bank borrowings totalling $29.5 million in respect of
events that arose prior to execution of the rescheduling agreements.



In the meanwhile, discussions have continued between REA Kaltim and its only
other bank lender, Commerzbank, for the rescheduling of the Commerzbank loan on
terms that are consistent with the rescheduling agreements reached between REA
Kaltim and its Indonesian bankers.  Such discussions have concentrated
principally on the Commerzbank tranche A loan because the Commerzbank tranche B
loan is effectively an intra-group balance.  This last is because the company
has deposited cash of $5.5 million with Commerzbank, representing the full
principal amount of the Commerzbank tranche B loan, and, in consideration of
that deposit, Commerzbank has assigned to the company substantially all of its
rights in the Commerzbank tranche B loan.



A conditional agreement on rescheduling of the Commerzbank tranche A loan was in
fact reached between Commerzbank and REA Kaltim during the course of 2002.
Satisfaction of the conditions of such agreement has been complicated by the
refusal of the MEZ group to agree to the release of the MEZ guarantee.  This is
notwithstanding that, in May 2001, the MEZ group failed to meet a call on the
MEZ guarantee and commenced proceedings in New York against Commerzbank seeking
a declaratory judgement that Commerzbank had no right to accelerate the MEZ
guarantee on the basis of a default on the Commerzbank tranche B loan (although
REA Kaltim has received legal advice that the default in question, which
resulted from REA Kaltim's failure to pay interest on the Commerzbank tranche B
loan following its decision to suspend all debt service, did cause a
cross-default under the Commerzbank tranche A loan).  Accordingly, REA Kaltim is
now seeking to renegotiate the conditional agreement with Commerzbank onto a
basis that will overcome this complication.



As explained under 'Working capital' below, of the total current indebtedness of
the group, substantially the whole (other than the convertible stock and
intra-group indebtedness) is indebtedness of REA Kaltim.  That indebtedness
(excluding balances owed to, or backed by cash collateral from, other members of
the group) amounts to $43.175 million (£27.1 million) and is made up of the
monies owed to REA Kaltim's Indonesian bankers and the Commerzbank tranche A
loan (as both referred to above), together with a balance of $8.175 million owed
to the MEZ group.



In October 2002, REA Kaltim submitted proposals to the MEZ group for the
rescheduling of the MEZ loan on a basis consistent with that agreed with its
Indonesian bankers.  Those proposals were declined by the MEZ group and the MEZ
group instead demanded immediate repayment of the loan and has threatened
bankruptcy proceedings against REA Kaltim if such repayment is not made.  REA
Kaltim has been advised that were the MEZ group to implement that threat it
would be open to REA Kaltim to seek a suspension of payments under the authority
of the Indonesian courts and to submit a composition plan which, if approved by
the requisite majority of unsecured lenders (which the directors believe could
be procured), would be binding on all lenders including the MEZ group.



The directors believe that it would be preferable if the MEZ group's demand for
repayment of the MEZ loan could be resolved without court proceedings in
Indonesia.  However, the MEZ loan is only one aspect of the MEZ claims.
Moreover, (as will be explained in more detail in the circular) the MEZ loan is
relevant to the MEZ group's remaining minority interest in Makassar.   Any
decision needed from the company in relation to REA Kaltim's response to the
demand for repayment of the MEZ loan will therefore need to be considered in
this context.



A negotiated settlement that provided a total resolution of the position as
between the group and the MEZ group would, in the directors' view, be the most
satisfactory way forward but the directors consider that such a resolution must
be on economically defensible terms that reflect the reality of the MEZ group's
present rights in respects of its interests in the East Kalimantan project and
give no weight to claims that are wholly without foundation.  If a satisfactory
negotiated settlement cannot be achieved, the directors intend to continue to
defend vigorously the company and its directors against, and protect the
commercial interests of the company in the face of, the MEZ claims.



Whilst the group has not yet reached a position of complete certainty in
relation to its debt repayment obligations and its prospective liabilities, the
position has become considerably clearer than it was at the time of the April
2002 open offer in that legally binding agreements are now in place for the
rescheduling of the major part of REA Kaltim's indebtedness (which was not the
case in April 2002).  Against that greater clarity, and with the knowledge that
the business of the group is continuing to develop in accordance with
expectations, the directors have felt it appropriate to re-evaluate the likely
future cash requirements of the group.  They have concluded that it would be
prudent to reinforce further the financial resources of the group by raising
some additional working capital by way of an equity issue.  The open offer is
proposed with this objective.



Open offer

Pursuant to the open offer, the company is seeking to raise up to £2.6 million
(before expenses) from the subscription of up to 3,586,957 new ordinary shares.
To that end, qualifying holders are being invited to subscribe new ordinary
shares at a price of 73p per share, payable in full on application, on the
following proportionate bases

          1 new ordinary share for every 6 existing ordinary shares;

          1 new ordinary share for every 6 warrants;
                    and

          1 new ordinary share for every £3.18 nominal of convertible stock

in each case as held by them at the close of business on 12 February 2003.
Entitlements to new ordinary shares will be rounded down to the nearest whole
number of new ordinary shares.

The open offer is conditional upon the passing of the necessary resolution of
the company in general meeting and upon admission of the new ordinary shares to
the Official List and to trading on the London Stock Exchange's market for
listed securities.  It is also conditional upon the placing agreement becoming
unconditional and remaining in full force and effect until such time as the open
offer becomes otherwise unconditional.  Further details of the open offer,
including the procedure for application and payment, will be set out in the
circular and in the application forms that will accompany it.

The open offer is being made to holders of warrants and convertible stock on a
basis equivalent to that that would have applied had the exercise rights
attaching to the warrants and the conversion rights attaching to the convertible
stock been exercisable and duly exercised immediately prior to 12 February 2003.
  Accordingly, pursuant to the provisions of the instruments constituting the
warrants and convertible stock, no adjustment will be made upon completion of
the open offer to the terms of exercise attaching to the warrants or to the
conversion terms attaching to the convertible stock.



The open offer has not been underwritten.  New ordinary shares the subject of
the open offer will be issued pursuant to the open offer only to the extent that
such shares are subscribed by qualifying holders who take up their entitlements
under the open offer.



Support for the open offer

The directors (together with persons connected with them within the meaning of
section 346 of the Companies Act 1985), other than Mr C L Lim, intend to take up
their entitlements to new ordinary shares pursuant to the open offer to the
extent of not less than 120,000 new ordinary shares in aggregate (representing
3.3 per cent of the new ordinary shares the subject of the open offer).  The
interest of Mr Lim in the existing ordinary shares and convertible stock  is
that of Agusan Plantations Inc which is a person connected with Mr Lim within
the meaning of section 346 of the Companies Act 1985 and which holds 150,000
existing ordinary shares and £1,420,572 nominal of convertible stock.  Agusan
Plantations Inc has confirmed its support for the open offer but has indicated
that, although it would hope to take up at least part of its entitlements
comprising 471,721 new ordinary shares (representing 13.2 per cent per cent of
the new ordinary shares the subject of the open offer), a decision to that
effect remains subject to board consideration.



By an agreement dated 20 February 2003, Emba has agreed, subject to satisfaction
of the conditions of the open offer, to take up in full its entitlements to new
ordinary shares under the open offer comprising 1,377,072 new ordinary shares
(representing 38.4 per cent of the new ordinary shares the subject of the open
offer).   Certain institutional shareholders have also agreed, to take up their
full entitlements comprising 411,173 new ordinary shares (representing 11.5 per
cent of the new ordinary shares the subject of the open offer).



Placing

Pursuant to the placing agreement, Canaccord Capital (Europe) Limited has placed
1,350,000 new ordinary shares, conditionally upon satisfaction of the conditions
of the open offer and due compliance by the company with the terms of the
placing agreement, and will seek to place, on or before 14 March 2003 and upon
like conditions, up to a further 800,000 new ordinary shares, in each case at a
price of 73p per share (being the open offer subscription price) so as to raise
for the company up to £1.6 million (before expenses).  The placing agreement
contains provisions for its termination by Canaccord Capital (Europe) Limited
under certain circumstances being principally circumstances involving a material
adverse change likely to cause a substantial deterioration in the price or value
of the new ordinary shares or to prejudice the success of the placing and open
offer.



The directors consider that it is desirable to broaden the company's shareholder
base by increasing the number of institutional holders of its ordinary shares.
However, they believe that it would be difficult to achieve this simply by
underwriting the open offer; underwriting commitments would not offer potential
new institutional investors the certainty of acquiring what to them would
represent a worthwhile investment in the company.  Accordingly, the directors
are instead proposing the combination of the placing and open offer.  This
combination is designed to ensure that, taking account of the commitments from
existing shareholders to take up entitlements under the open offer and of the
firm component of the placing, the company will raise overall the minimum level
of new capital that is seeking.



Use of proceeds

The minimum net proceeds of the placing and open offer will, on the basis of the
estimated expenses, amount to £2.0 million.  Such proceeds and any further
proceeds above the minimum (together amounting at most to £3.9 million) will be
utilised to augment the group's working capital resources.



As explained under 'Working capital' below, there are at present risks as to the
adequacy of the group's working capital that stem from the fact that
negotiations for the rescheduling of the Commerzbank tranche A loan have not yet
resulted in an unconditional binding legal agreement and the fact that REA
Kaltim faces a demand for immediate repayment of the MEZ loan.  The availability
of the net proceeds of the placing and open offer will reduce those risks.  The
extent to which the net proceeds will actually be used in relation to the
Commerzbank tranche A loan or the MEZ loan cannot currently be projected with
certainty.  Accordingly, in the immediate term, the net proceeds of the placing
and open offer will be placed on deposit to be available if required.  To the
extent not so required, the net proceeds will ultimately be used to reduce debt
to the extent that such reduction is compatible with retaining such cash
reserves for the group as the directors consider adequate having regard to any
continuing financial uncertainties.



Current trading and prospects

The directors have been much encouraged by the progress that has been made over
the past year in converting operational expectations into realities.



Palm product output continues to meet expectations.  Actual output for 2002 was
59,000 tonnes which was slightly ahead of the last published projection of
57,000 tonnes.  The budget for 2003 output is 80,000 tonnes which is exactly in
line with previous projections.  Moreover, with data becoming available as to
the actual performance of the East Kalimantan project's initial plantings (which
are now reaching full maturity), REA Kaltim has concluded that its previous
assumptions as to fully mature yields and extraction rates were overly
conservative.   Accordingly palm product output on full maturity of the existing
13,200 hectare development is now projected to exceed 100,000 tonnes (as
compared with the level of 93,000 tonnes that was previously projected).



A firm Indonesian rupiah combined with increasing labour costs and reducing
local subsidies had some impact on operating costs in 2002 when viewed in US
dollar terms.  Going forward, it is hoped that the negative effect of such local
cost inflation can be substantially offset by operating efficiencies achievable
from growing production volumes and from a better absorption of overheads that a
planned expansion of planted areas should permit.



In any event, following a rise in the price per tonne of crude palm oil cif
Rotterdam from $325 at the beginning of 2002 to a current level of $445 per
tonne (as shown by the Financial Times web site for 18 February 2003, the latest
practicable date before the publication of this document), the group is now
enjoying materially higher prices for its crude palm oil production than have
been achievable at any time hitherto since the East Kalimantan project commenced
production.  The increase in revenues attributable to higher prices greatly
outweighs the increase in costs that has resulted from local cost inflation.



With a 73 per cent increase in palm product output and better selling prices,
group turnover for 2002 will show a very significant increase on that of the
previous year.  However, it must be recognised that, for 2002, such turnover had
to cover substantially all the costs of operating the existing 13,200 hectare
development with much of the plantings comprised in that development still to
achieve their full yield potential (so that unit costs of production were higher
than they are expected to be when the existing planted areas reach full
maturity). The group results for 2002 will reflect this.



Looking forward to 2003, total revenue costs in US dollar terms are not expected
to be materially higher than in 2002.  Accordingly, with palm product output
projected to increase further, unit costs of production for 2003 may be expected
to be lower than in 2002.  That consideration, coupled with the current level of
the crude palm oil price provides a basis for some optimism regarding the
group's 2003 results although the actual results achieved will, inevitably, be
highly dependent upon the average price realised for the group's palm product
output over the year as a whole and not simply on the price levels now
prevailing.  Short term forward sales of crude palm oil are being made each
month to cover future production.  Forward sales contracts of crude palm oil at
the end of January 2003 represented about 11 per cent of the expected production
for the remainder of the year but these contracts will provide only limited
protection should prices fall significantly.



Apart from expenditure currently in hand of some $3 million (£1.9 million) on
further expansion of the processing capacity of the oil mill to 80 tonnes per
hour (from its present level of 40 tonnes), the directors expect that, as
regards the existing development area of 13,200 hectares, capital expenditure on
infrastructure and equipment will in future be limited mainly to replacement
expenditure. With the increasing crops that the existing developed areas are
yielding, and the cash flows that can be expected if crude palm oil prices
remain at or around current levels, the directors intend that REA Kaltim should,
in 2003, recommence extension planting at an initial annual rate of 3,000
hectares and should aim, from 2005, progressively to increase that rate with a
view to completing the planting of the designated nucleus area of 50,000
hectares (including the 13,200 hectares already developed) by the end of 2010.



The group has previously, for illustrative purposes only, published (most
recently in the prospectus published by the company on 26 April 2002) an
indication of the profits that might be achievable by the East Kalimantan
project in 2005 on the basis of an average crude palm oil price during that year
of $450 per tonne.  A revision of that indication, maintaining the price of $450
per tonne but updated to reflect latest crop and cost projections and adjusted
to cover the profits not just of the East Kalimantan project but those of the
group as a whole (so that, in particular, UK head office costs have been
reflected), is set out below.  The directors stress that the indication is
illustrative only and is on no account to be taken as a forecast.


                                                                                           $'m        £'m
Turnover                                                                                  36.0       22.6
Cost of sales (1)                                                                       (11.2)      (7.0)
                                                                                          24.8       15.6
Other income and expenses                                                                (3.9)      (2.4)
Interest and financing charges (2)                                                       (0.4)      (0.3)
Profit on ordinary activities before taxation                                             20.5       12.9



Notes



(1)    Cost of sales includes depreciation of $3.5 million (£2.2 million)

(2)    Interest and financing charges assume that all 2005 REA Kaltim
indebtedness will bear interest at the restructured rates that have now been
agreed between REA Kaltim and its Indonesian bankers with SIBOR unchanged from
its present level of 11/2 per cent per annum.  The debt level (net of cash) upon
which interest and financing charges have been projected assumes receipt of the
minimum net proceeds of the placing and open offer but makes no provision for
financing any settlement of the MEZ claims beyond settlement of obligations to
the MEZ group that REA Kaltim acknowledges as owing.

(3)    The group has tax losses available to carry forward that are projected,
on the assumptions underlying the above illustration, to be sufficient to cover
the major part of 2005 chargeable profits.

(4)    The annual dividend entitlement of holders of preference shares currently
amounts to £513,000 and that of external holders of preference shares in MP to
$330,000 (£207,000).  The MEZ group holds a minority interest in the equity of
Makassar.



Considering the above and, in particular, taking account of the extensions to
existing planted areas that are now planned, the directors are becoming
increasingly optimistic as to the future prospects for the group and of the
upside that can be obtained from developing the East Kalimantan project into one
of the largest single site oil palm plantations in South East Asia.  That
optimism must, however, be tempered by realism as to the risks inherent in the
financial uncertainties described under 'Working capital' below and in the
continuing political uncertainties of Indonesia, although the extent of such
risks is felt by the directors to have reduced over the past twelve months.



Working capital

The directors are of the opinion that the group does not have sufficient working
capital for its present requirements, that is for at least twelve months
following the date of this document.



This is because of uncertainties affecting certain of the financial obligations
of the group.



As at the date of this document, the material external indebtedness of the group
(excluding for this purpose intra-group balances and third party loans backed by
cash collateral provided from within the group) comprises the convertible stock,
other UK borrowings of some £350,000 and the following indebtedness of REA
Kaltim:


                                                                                              $'m       £'m
Local Indonesian bank loans                                                                  29.5      18.5
Commerzbank loan                                                                              5.5       3.5
MEZ loan                                                                                      8.2       5.1
                                                                                             43.2      27.1





As noted under 'Background' above, formal contracts have now been signed with a
sufficient number of REA Kaltim's Indonesian bankers to ensure that no default
can be declared in respect of the REA Kaltim Indonesian bank borrowings
totalling $29.5 million in respect of events that arose prior to execution of
the rescheduling agreements.  However, negotiations for the rescheduling of the
Commerzbank tranche A loan have not yet resulted in an unconditional binding
legal agreement to reschedule that loan.  Moreover, REA Kaltim faces a demand
for immediate repayment of the MEZ loan, albeit that such demand would not be
enforceable if REA Kaltim successfully sought a composition with its creditors
under the authority of the Indonesian courts by securing support for such
composition from the requisite majority of its creditors.



The directors are confident that agreement can be reached with Commerzbank for
the rescheduling of the Commerzbank tranche A loan and that REA Kaltim will be
able to resolve the issue of the demand for repayment of the MEZ loan on terms
such that, provided that crude palm oil prices do not fall materially below
current levels, the group will, following receipt of the minimum proceeds of the
placing and open offer, have sufficient working capital for its present
requirements, that is for at least twelve months following the date of this
document.



If the directors' confidence in the above regard should prove misplaced or if
the price of crude palm oil should fall materially below current levels, or if
the company were to be held liable for the MEZ claims (a result that is not
anticipated), absent arrangements that are not currently in place for additional
or replacement debt financing, it may be necessary for the company to seek
additional equity funding.



If REA Kaltim should require additional funding, whether for the reasons stated
above or otherwise, and the group prove unable to raise this funding, REA Kaltim
may become insolvent.  In that event, the value of the East Kalimantan project
and of the company's interest in that project could be seriously diminished.
Moreover, since the East Kalimantan project is the sole business of the group,
the loss of that business would be likely to have a material adverse impact on
the value of the company's shares and could render the company unsuitable for
listing.



Should the placing and open offer not proceed, the directors still believe that
there is a reasonable expectation that agreement will be reached with
Commerzbank for the rescheduling of the Commerzbank tranche A loan and that REA
Kaltim will be able to resolve the issue of the demand for repayment of the MEZ
loan on terms such that the group will have sufficient working capital for its
present requirements.  However, without the minimum proceeds of the placing and
open offer, the risks that the group would face, should the directors' belief in
this regard prove misplaced, would be higher.  As time progresses, the group
can, on the basis of current crude palm oil prices, expect increasingly positive
cash flows from the East Kalimantan project.  The risks in the uncertainties
affecting the adequacy of working capital are therefore most acute in the short
term and the greater the cash resources available to meet the uncertainties, the
lower the risks in question.



In order to reduce further the risks described above, the group is seeking to
establish additional long term financing facilities to provide the group with
greater financial resources and facilitate refinancing by REA Kaltim of the
Commerzbank tranche A loan and the MEZ loan should REA Kaltim deem this
expedient.  The directors consider that there is a reasonable expectation that
such additional facilities can be procured but anticipate that this may take
several months.  The directors expect that the uncertainties affecting the
adequacy of working capital can be overcome in a similar time frame.



Dividends

No dividend has been paid on the preference shares since 30 June 2001 and the
fixed cumulative dividend on those shares is therefore in arrears to the extent
of the semi-annual dividend that fell due on 31 December 2001 and the dividends
due in respect of 2002.  The rights of the preference shares provide for
accumulation of arrears of preference dividends so that no entitlement to
dividends will be lost by preference shareholders.  However, the directors
recognise that many preference shares are acquired for income and that the
postponement of that income is unsatisfactory.



Subject to the price of crude palm oil remaining at or above current levels for
the remainder of 2003, and provided that any requirement in 2003 to reduce the
external group obligations detailed under 'Working capital' above can be met
substantially by new borrowings and the net proceeds of the placing and open
offer, the directors hope that the company will be able to recommence payment of
dividends on the preference shares on 31 December 2003 with a dividend on that
date equal to the semi-annual dividend then falling due.  Thereafter the
directors would hope to be able progressively to reduce the accumulated arrears
of dividend on the preference shares.



Pursuant to the company's articles of association, no dividend can be paid on
the company's ordinary shares until such time as all arrears of dividend on the
preference shares have been eliminated.



Extraordinary general meeting

Further details concerning the extraordinary general meeting of the company has
been convened for 10.00 am on 17 March 2003 will be set out in the circular.



In view of the fact that the fixed cumulative dividend on the preference shares
is in arrears by more than six months, holders of preference shares will be
entitled to vote at the extraordinary general meeting.



Recommendation

The directors consider that implementation of the placing and open offer is in
the best interests of the company and its shareholders, as a whole.
Accordingly, the directors recommend all shareholders to vote in favour of the
resolution set out in the notice of the extraordinary general meeting convened
for 17 March 2003, as they (and persons connected with them within the meaning
of section 346 of the Companies Act 1985) intend to do in respect of their own
beneficial holdings of 922,540 shares in aggregate (representing 5.0 per cent of
the issued shares of the company).



An undertaking to vote in favour of the resolution set out in the notice of the
extraordinary general meeting has been obtained from Emba in respect of its
holding of 5,656,364 ordinary shares (representing 30.7 per cent of the issued
shares of the company).



Further information

With effect from the date on which the circular is despatched up to and
including the date of the extraordinary general meeting referred to in the
circular, copies of the circular will be available for inspection at the
Document Viewing Facility of the UK Listing Authority and may be obtained free
of charge from the company at its registered office, 40-42 Osnaburgh Street,
London NW1 3ND.



Expected Timetable

Record date for the open offer                                             12 February 2003

Announcement of the placing and open offer
and despatch of circular                                                   12 February 2003

Latest time and date for splitting                                               3.00 pm on
application forms                                                             12 March 2003

Latest time and date for receipt of completed                                    3.00 pm on
application forms and remittances                                             14 March 2003

Latest time and date for receipt of proxies for
use in connection with the extraordinary general                                10.00 am on
meeting                                                                       15 March 2003

Extraordinary general meeting                                                   10.00 am on
                                                                              17 March 2003

Open offer unconditional, listing effective and
commencement of dealings in new ordinary shares                               18 March 2003

CREST accounts credited in respect of new ordinary
shares subscribed pursuant to the open offer                                  21 March 2003

Definitive shares certificates despatched                                     25 March 2003







Enquiries:


Toby Hayward
Canaccord Capital (Europe) Limited                                           020 7518 2777

John Oakley
R.E.A. Holdings plc                                                          020 7419 0100




Definitions



Unless the context otherwise requires, the following definitions apply
throughout this announcement


'application form'                      the form upon which a qualifying holder may apply for new
                                        ordinary shares pursuant to the open offer
'board' or 'directors'                  the directors of the company
'Commerzbank'                           Commerzbank (South East Asia) Ltd
'Commerzbank loan'                      the loan of $11 million advanced by Commerzbank to REA
                                        Kaltim pursuant to a  facilities agreement of 3 December
                                        1997 as amended by a supplemental agreement of 28 May 1999
                                        and made up of two equal tranches of $5.5 million each
'Commerzbank tranche A loan'            the $5.5 million tranche A of the Commerzbank loan which
                                        was the subject of the MEZ guarantee
'Commerzbank tranche B loan'            the $5.5 million tranche B of the Commerzbank loan which
                                        is supported by a $5.5 million cash participation by the
                                        company
'company' or 'REA'                      R.E.A. Holdings plc
'convertible stock'                     the £3.8 million nominal of 4 per cent convertible loan
                                        stock 2012 of the company currently in issue
'East Kalimantan project'               the oil palm plantation project in East Kalimantan, a
                                        province of Indonesia, being developed by REA Kaltim
'Emba'                                  Emba Holdings Limited
'existing ordinary shares'              the existing issued ordinary shares
'group'                                 REA, R.E.A. Services Limited, MP, Makassar and REA Kaltim
'Listing Rules'                         the Listing Rules of the UK Listing Authority
'London Stock Exchange'                 London Stock Exchange plc
'Makassar'                              Makassar Investments Limited
'MEZ guarantee'                         the guarantee of the Commerzbank tranche A loan that was
                                        given by a member of the MEZ group
'MEZ claims'                            the claims made by the MEZ group pursuant to a complaint
                                        dated 16 November 2001 and filed with the United States
                                        District Court of the Southern District of New York
'MEZ group'                             Mr M E Zukerman and entities associated with, or
                                        understood to be associated with, Mr M E Zukerman,
                                        including Bodley Investment Company, M. E. Zukerman & Co.
                                        Inc, M. E. Zukerman Investment Limited and the Zukerman
                                        family trust, or, where the context so requires, any one
                                        or several of such individual and entities
'MEZ loan'                              the loan of $8.175 million made by the MEZ group to REA
                                        Kaltim
'MP'                                    Makassar Participations plc
'new ordinary shares'                   the new ordinary shares proposed to be issued pursuant to
                                        the placing and open offer
'ordinary shares'                       ordinary shares of 25p each in the capital of the company
'open offer'                            the invitation to qualifying holders to subscribe up to
                                        3,586,957 new ordinary shares at a price of 73p per share
'placing'                               the subscription by placees of up to 2,150,000 new
                                        ordinary shares at a price of 73p per share pursuant to
                                        the placing
'placing agreement'                     the contract whereby, subject to satisfaction of the
                                        conditions of the open offer, Canaccord Capital (Europe)
                                        Limited has placed 1,350,000 new ordinary shares and will
                                        seek to place up to a further 800,000 new ordinary shares
                                        (up to 2,150,000 new ordinary shares in total) at a price
                                        of 73p per share
'preference shares'                     9 per cent cumulative preference shares of £1 each in the
                                        capital of the company
'qualifying holders'                    holders of existing ordinary shares, warrants and
                                        convertible stock on the registers of members, warrant
                                        holders and convertible stockholders at the close of
                                        business on 12 February 2003
'REA Kaltim'                            P.T. REA Kaltim Plantations
'shareholders'                          holders of existing ordinary shares and preference shares
'SIBOR'                                 Singapore inter-bank offered rate (being the rate offered
                                        for inter-bank deposits in the Singapore inter-bank
                                        market)
'warrants'                              listed warrants of the company each entitling the holder
                                        to subscribe for one ordinary share at a price of 73.5p
                                        either in cash or by surrender of 0.735 preference shares




                      This information is provided by RNS
            The company news service from the London Stock Exchange                MTBLJ