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Equatorial Palm Oil investor Andrew Milne completes share subscription


Equatorial Palm Oil PLC (LON:PAL) (EPO) said private investor Andrew Milne has subscribed for an additional 400,000 new ordinary shares in the company.

He has now completed the entire subscription of 6,857,143 shares at 17.5 pence as laid out in the company’s February 2010 AIM admission document to raise £1.2 million.

"As an active private investor, I am pleased to have completed my subscription for new shares in the company which represents a substantial investment in EPO and this palm oil project,” Milne said.

EPO joined the AIM market last year following a £6.5 million IPO. The company aim is to become a sustainable, low-cost producer of crude palm oil in Africa through the reactivation and development of existing plantations and its agricultural land bank in Liberia.

Three weeks ago, it reported that the joint venture agreement with Indian conglomerate, the Siva Group, has been fully implemented. The deal had initially been flagged in September 2010.

The JV company has received US$22.5 million in cash from Biopalm Energy, a wholly-owned subsidiary of Siva Ventures. EPO itself is investing US$7.5 million into the JV.

The deal also includes a US$30m loan facility to accelerate the development of EPO’s palm oil operations in Liberia.

The 50:50 JV controls EPO’s entire 169,000 hectare land position at Palm Bay, Butaw and River Cess in Liberia.

BioPalm is already the EPO’s largest shareholder with a 29 percent stake in the company, after the Indian investor subscribed for £5 million in new equity (33.3m shares) back in May 2010.

In Liberia, EPO plans to develop 50,000 hectares in oil palm plantations within 10 years, the ‘strategic plan’ targets a 250,000 tonnes per annum (tpa) crude palm oil (CPO) operation.

According to EPO, palm oil is the most important and widely produced edible oil in the world, and demand is projected to grow at 5-6 percent per annum over the next five years.

Palm oil is to food production what iron ore is to heavy industry. It is an ingredient found in everything from Galaxy chocolate to Goodfella’s pizza. It even crops up in Persil soap powder. And in common with many basic minerals and hard commodities, demand for palm oil is buoyant and expanding all the time.

Liberia is a politically stable country and is becoming a fast growing investment destination for multi-national corporations, EPO said. Furthermore, the oil palm is indigenous to West Africa and cultivating it in this region avoids the adverse environmental impact the plant has on countries across Southeast Asia, where large areas are affected by a significantly lowered water table as a result of oil palm growing.

EPO believes the application of South-East Asian techniques and the latest seed genetics may enable Africa to become a key player in the world palm oil market again.

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