KLK Expanding Into Liberia
Equatorial Palm Oil PLC (PAL:LN), the London Stock Exchange AIM listed palm oil development and production company announced September 6, 2016 that their joint venture Liberian Palm Developments has received a $30 million loan from KLK Agro Plantations (KLK Agro).
KLK Agro Plantations (KLK Agro) and Equatorial Palm Oil each own 50% in Liberian Palm Developments Limited. KLK Agro itself is a wholly owned subsidiary of Kuala Lumpur Kepong Berhad (KLK:MK). Separately, KLK currently owns 68.86% in Equatorial Palm Oil PLC.
The loan proceeds will finance the next phase of construction of a 60 metric ton palm oil mill to be built on the Palm Bay Estate, Liberia. Palm oil from this new mill will be exported through the Equatorial Palm Oil PLC subsidiary LIBINC Oil Palm Inc. facility at the port of Buchanan.
The $30 million unsecured loan is due January 25, 2020 at a rate of 3-month LIBOR +5%. This loan is in addition to a previously announced $20.5 million loan from KLK Agro to Liberian Palm Developments that has been fully drawn down.
Equatorial Palm Oil PLC’s total comprehensive income for fiscal year 2015 was negative $1.484 million.
KLK has appointed three directors to the board of directors of Equatorial Palm Oil including Lee Oi Hian, Executive Director, Chairman of the Group Risk Management Committee, KLK and Yap Miow Kien, Company Secretary and Senior General Manager, KLK.
According to the Roundtable on Sustainable Palm Oil, Equatorial Palm Oil PLC, the Sustainable Development Institute and local Liberian communities have signed a Memorandum of Understanding regarding land conflict concerning over 1,570 ha in Liberia deemed “new plantings”. Since 2011, Equatorial Palm Oil PLC has replanted 7,300 ha in Liberia.
Equatorial Palm Oil PLC has committed to applying High Carbon Stock methodologies and has engaged The Forest Trust (TFT) to assess new plantings
Indonesian Officials Held Hostage by Group Possibly Linked to Corporation
A team of seven Indonesian Ministry of Environment and Forestry officials were held hostage this past weekend by a group believed to be mobilized by PT Andika Permata Sawit Lestari, Ltd. The government investigation team initially found that more than 2,000 hectares of forest had been burned by workers of the company, according to a ministry statement Sunday. Following hostage negotiations, the team was released after agreeing to erase files from their digital camera, except for pictures taken by a drone.
Under Indonesian law, companies found guilty of setting fires to clear land can face hefty fines and individuals can be imprisoned for up to 10 years.
The Indonesian government says more than 450 people suspected of starting fires have been arrested since January and at least nine companies are currently under investigation.
Last week, six provinces in Indonesian Sumatra and Borneo declared emergencies, with forest fires blanketing a swath of Southeast in a smoky haze.