16 May 2008
NOT FOR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO AUSTRALIA, CANADA, JAPAN, MALAYSIA, THE REPUBLIC OF SOUTH AFRICA OR THE UNITED STATES
NEW BRITAIN PALM OIL LIMITED
US$43.8 MILLION CASH OFFER FOR
RAMU AGRI-INDUSTRIESLIMITED
INCLUDING LONG TERM LEASES OVER 30,000 HECTARES OF LAND
New Britain Palm Oil Limited (LSE: NBPO) (“NBPOL” or the “Company”), a large scale integrated industrial producer of palm oil in Australasia, announcesa cash offer (the “Offer”) forall of the sharesin the capital of Ramu Agri-Industries Limited (“Ramu”) which it does not own. Ramu, a company listed on Papua New Guinea's ("PNG") Port Moresby Stock Exchange,holds long term leases over approximately 30,000 hectares of land in the RamuValley in PNG.
At the date of the Offer the Company holds 4,689,283 shares in Ramu representing 19.45 per cent. of the issued capital of Ramu.
The cash consideration offered for each RamuShare is K5.00(approximately US$1.82) with total consideration (including the shares already acquired by NBPOL above) of approximately K120.5 million(approximately US$43.8 million) in cashto befunded from NBPOL’s existing cash resources. As at 31 March 2007, Ramu had net debt of approximately K37.7million (approximately US$13.7 million).
KEY HIGHLIGHTS
- NBPOL's stated objective on its London listing in December 2007 was to double its entire plantation area within seven to eight years. The acquisition of Ramu would allow NBPOL to expand significantly its oil palm plantations, providing approximately 50 per cent. of its plantation development target once developed. NBPOL remains confident about delivering on its stated objective.
- The directors of NBPOL believe that the Offer represents compelling value. Ramu has over 4,500 productive hectares of oil palm plantations, with an established mill and infrastructure, and approximately 16,000 hectares of land that the Directors expect to have the potential to be developed into oil palm plantations. The Directors believe that the price per hectare, once the development costs are factored in, is likely to be favourable when compared to similar land currently being sold in Indonesia and Malaysia.
- For the year ended 31 March 2007, Ramu reported audited turnover of approximately K107.0million (approximately US$38.9 million) and profits before tax of approximately K6.4million (approximately US$2.3 million). As at 31 March 2007, Ramu reported gross assets of approximately K155.1million (US$56.4 million).
- NBPOL’s rigorous sustainability criteria and highly regarded environmental credentials are expected to be maintained across Ramu's land holding.
- The directors of NBPOL are confident that the new plantations will benefit greatly from NBPOL’s high quality seeds and its skilled and successful management methods. Furthermore, they expect the potential yield of Fresh Fruit Bunches (“FFB”) per hectare to be good with high oil extraction rates.
- A takeover notice under the PNG Takeovers Code, dated 16 May 2008, has been sent by NBPOL to Ramu. The offer document must be posted to Ramu Shareholders within 30 days from the date of the Takeover Notice, which then triggers the commencement of the offer period.
- The Offer will be made in accordance with the rules of the PNG Takeovers Code and will remain open for acceptance for 30 days from the date of the offer document, subject to any extensions permitted under the PNG Takeovers Code.
- The Offer will be conditional on, amongst other things, valid acceptances being received in respect of not less than 90 per cent. of the Ramu Shares to which the Offer relates (though this condition can be waived by the Offeror in accordance with the terms of the PNG Takeovers Code) and the approval of the Bank of Papua New Guinea and PNG's Investment Promotion Authority.
This summary should be read in conjunction with, and is subject to, the fulltext of this announcement. The Offer will be made in accordance with the rules of the PNG Takeovers Code and the full conditions and terms which will be set out in the offer document expected to be despatched to Ramu Shareholders as soon asis reasonably practicable.
Nick Thompson, NBPOL’s Chief Executive Officer, commented:
“This is an important acquisition for New Britain Palm Oil. Ramuis an excellent strategic and operational fit with NBPOL,adding approximately 30,000 hectares of extremely attractively priced land, much of it for potential development into oil palm plantations. It accelerates considerably our planting programme, whilst at the same time maintaining our historic focus on sustainable and ethical palm oil production.
With our long and successful track record of developing and managing our oil palm estates andwith the use of our high quality seeds as a fully integrated producer, we believe that this acquisition should build on our achievements. New Britain Palm Oil’s strong balance sheet should allow us to develop quickly the agricultural potential of Ramu's assets. We remain as a group very well positioned to capitalise on the positive trends we see in the palm oil market.”
Enquiries:
Gavin Anderson (Financial PR Adviser)Ken Cronin / Janine Brewis / Anthony Hughes / Tel: +44(0)20 7554 1400
Email:
New Britain Palm Oil Limited
Nick Thompson
Alan Chaytor
David Dann / Tel: +44(0)20 7554 1400
Kaupthing Singer & Friedlander
Nicholas How / Tel:+44 (0)20 3205 5000
Website:
16 May 2008
NOT FOR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO AUSTRALIA, CANADA, JAPAN, MALAYSIA, THE REPUBLIC OF SOUTH AFRICA OR THE UNITED STATES
NEW BRITAIN PALM OIL LIMITED
US$43.8 MILLION CASH OFFER FOR
RAMU AGRI-INDUSTRIES LIMITED
INCLUDING LONG TERM LEASES OVER 30,000 HECTARES OF LAND
New Britain Palm Oil Limited (“NBPOL” or the “Company”), a large scale integrated industrial producer of palm oil in Australasia, announcesa cash offer (the “Offer”) forall of the sharesin Ramu Agri-Industries Limited (“Ramu”) which it does not hold. Ramu, a company listed on the Port Moresby Stock Exchange, holds long term leases over approximately 30,000 hectares of land in the RamuValley in PNG.
At the date of the Offer the Company holds 4,689,283 shares in Ramu representing 19.45 per cent. of the issued capital of Ramu.
The cash consideration offered for each Ramu Share is K5.00 (approximately US$1.82) with total consideration (including the shares already acquired by NBPOL above) of approximately K120.5 million (approximately US$43.8 million) in cash to be funded from NBPOL’s existing cash resources. As at 31 March 2007, Ramu had net debt of approximately K37.7million (approximately US$13.7 million).
The Offer
A takeover notice under the PNG Takeovers Code, dated 16 May 2008, was sent by NBPOL to Ramu. Ramu has 14 days to respond to theTakeover Notice shortly following which NBPOL will despatch the offer document to Ramu Shareholders. The despatch of the offer document, which must be within 30 days of the sending of the Takeover Notice, triggers the commencement of the offer period which must be no shorter than 30 days, and no longer than 90 days. Accordingly, further updates will be made when appropriate.
The Offer will be made in accordance with the rules of the PNG Takeovers Code and will remain open for acceptance for 30 days from the date of the offer document,subject to any extensions permitted under the PNG Takeovers Code and unless the Offer is withdrawn in accordance with the PNG Takeovers Code.
The Offer will be conditional on, amongst other things, valid acceptances being received in respect of not less than 90 per cent. of the Ramu Shares to which the Offer relates(though this condition can be waived by the Offeror in accordance with the terms of the PNG Takeovers Code) and the approval of the Bank of Papua New Guinea and PNG's Investment Promotion Authority. Other terms and conditions of the Offer are considered customary fora public offer.
The Ramu Shares will be acquired pursuant to the Offer fully paid and free from all mortgages, charges, liens, encumbrances and interests of third parties of any kind, whether legal or otherwise, and restrictions on transfer of any kind. The Offeror will be entitled to all Rights accruing after the time of service of the Takeover Notice on Ramu in respect Ramu Shares which it acquires under the Offer.
Full acceptance of the Offerwill result in a payment to Ramu Shareholders of approximately US$43.8 million.
About Ramu
Ramu is the largest producer and exporter of sugar in PNG, as well as being PNG’s largest beef producer. It also has land under other crops including oil palm, peanuts and cashew nuts.
Ramu’s current land holding of approximately 30,000 hectares comprises over 4,500 productive hectares of oil palm plantations, with an established mill and associated infrastructure, 8,000 hectares currently under sugar cane, 14,000 hectares currently under beef cattle grazing and 2-3,000 hectares under other crops. As reported in its latest annual report, Ramu has a total of around 16,000 head of cattle.
For the year ended 31 March 2007, Ramu reported audited turnover of approximately K107.0 million (approximately US$38.9 million) and profits before tax of approximately K6.4million (approximately US$2.3 million). As at 31 March 2007, Ramu reported gross assets of approximately K155.1 million (US$56.4 million).
Rationale for the Offer
Ramu is considered to be an excellent strategic and operational fit with NBPOL’s existing 40,000 plus hectares of planted oil palm plantations.
The directors of NBPOL believe that the Offer represents compelling value. Ramu has over 4,500 productive hectares of oil palm plantations, with an established mill and infrastructure, and approximately 16,000 hectares of land that the Directors expect to have the potential to be developed into oil palm plantations. The Directors believe that the price per hectare, once the development costs are factored in, is likely to be favourable when compared to similar land currently being sold in Indonesia and Malaysia.
The RamuValley, where Ramu’s operations are based, is on mainland PNG. The shipping port used by Ramu at the major town of Laeis well-positioned such that there would be virtually no deviation of the shipping route to/from NBPOL’s current plantations in West New Britain.
The Directors are confident that NBPOL can fund the development costs of the 16,000 hectares of oil palm that is not yet planted (inclusive of all housing, infrastructure and a second mill) from NBPOL’s cash resources. The Directors consider that the expected development costs are based on conservative assumptions and the Directors have placed no valuation on existing infrastructure of housing and workshops. The Directors are also confident that their assumptions of future operating costs and palm oil prices are realistic.
NBPOL’s rigorous sustainability criteria and highly regarded environmental credentials are expected to be maintained across Ramu's land holding. The Directors do not expect any environmental issues as the areasof Ramu's land holding the Directors have identified as having the potential to be developed into oil palm plantations are already planted with sugar cane or left as pasture, which also has the additional benefit of making the areasmore cost effective to plant with oil palm.
NBPOL's stated objective on its London listing in December 2007 was to double its entire plantation area within seven to eight years. The acquisition of Ramu would allow NBPOL to expand significantly its oil palm plantations, providing approximately 50 per cent. of its plantation development target once developed. NBPOL remains confident about delivering on its stated objective.
The Directors are confident that the new plantations will benefit greatly from NBPOL’s high quality seeds and its skilled and successful management methods. The Directors expect the potential yield of Fresh Fruit Bunches (“FFB”) per hectare to be good with high oil extraction rates.
Notes to editors
NBPOL is a large scale industrial producer of sustainable palm oil in Australasia, with over 40,000 hectares of planted palm oil plantations, five oil mills, a refinery and a seed production and plant breeding facility. It is quoted on the London Stock Exchange’s main market under the ticker NBPO.L (commencement of dealing on 17 December 2007) and on the Port Moresby Stock Exchange in PNG.
NBPOL is fully vertically integrated, producing its own seed (which it also sells globally) and plants, cultivating and harvesting its own land and processing and refining palm oil. It also contracts directly with its end customers in the EU and arranges shipping of its products.
The palm oil market is undergoing a period of rapid change with demand from the developing and urbanising Asian economies and the new biofuel industry driving a marked increase in demand for vegetable oil products, including palm oil. The global price of palm oil has risen in response in part to this marked change in demand.
NBPOL has some of the world's highest yielding plantations of palm oil and is currently achieving yields per hectare approximately 19 per cent. above the world average due, in the Directors' opinion, to the favourable natural environment in PNG, high quality genetic material and skilled management.
NBPOL has a high level of control over its entire supply chain, from the control and development of its genetic material, through planting, harvesting, processing and finally contracting with its end customers.
NBPOL has high regard for the importance of its sustainability credentials and is active in proving its performance through its certification to ISO 14001 and its close involvement and support of the Roundtable on Sustainable Palm Oil (“RSPO”) – the RSPO has over 260 members, of which 12 are non-governmental organisations (including WWF and Oxfam). NBPOL’s Head of Research, Dr Simon Lord, is Vice President of the RSPO.
- ends -
This announcement does not constitute an offer to sell or the solicitation of an offer to acquire ordinary shares in the share capital of NBPOL.
Information contained in this announcement may include 'forward-looking statements'. All statements other than statements of historical facts included in this announcement, including, without limitation, those regarding NBPOL's financial position, business strategy, plans and objectives of management for future operations are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of NBPOL to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. NBPOL expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward looking statements contained in this announcement to reflect any change in NBPOL's expectations with regard thereto, any new information or any change in events, conditions or circumstances on which any such statements are based, unless required to do so by the Financial Services and Markets Act 2000, the Listing Rules of the UK Listing Authority or other applicable laws, regulations or rules.
No statement in this announcement is intended to be a profit forecast and no statement in this announcement should be interpreted to mean that Earnings per Share for the current or future financial years would necessarily match or exceed the historical published Earnings per Share.
DEFINITIONS
In this document unless the context otherwise requires:
PNG Takeovers Code means the Takeovers Code 1998 having the force of law under the Securities Act;
Directors means the directors of NBPOL;
K and Kina is the lawful currency of the Independent State of Papua New Guinea;
NBPOL, the Company or the Offeror means New Britain Palm Oil Limited;
Offer means an offer referred to in the Takeover Notice and the offer document;
PNG means the Independent State of Papua New Guinea;
POMSoXmeans Port Moresby Stock Exchange Limited;
Ramu Share(s) means fully paid ordinary shares in the capital of Ramu on issue as at the date of the Offer and all Rights attached to them;
Ramu Shareholder(s) means holders of Ramu Shares;
Rights means all accretions, rights or benefits arising to or arising from the Ramu Shares directly or indirectly after the date of service of the Takeover Notice on Ramu (including all rights to receive dividends and to receive or subscribe for shares, stock, units, notes or options and all other distributions or entitlements declared, paid or issued by Ramu after that date);
Securities Act means the Securities Act 1997; and
Takeover Notice means the takeover notice under Rule 22(1) of the PNG Takeovers Code, served by the Offeror on Ramu and dated 16 May 2008.
An exchange rate of 0.3635US$ / K as at 15 May 2008 (per Bloomberg) has been used for the purposes of translation in this announcement.