MP Evans Group PLC (AIM:MPE), the sustainable palm oil producer, has acquired a 5% minority stake in its Indonesian subsidiary trading companies.
The total cost of the acquisition was $14 million based on a price of US$9,000 per planted hectare and was funded from existing cash reserves.
However, cash outflow was $6 million as the sum was netted off against a loan the seller had with MPE.
This purchase was made by PT Evans Indonesia, the group’s subsidiary and included estates at Kota Bangun, Pangkatan, Bumi Mas, Musi Rawas, and Simpang Kiri.
The seller was Praba Madhavan PA Madhavan. After this transaction, the only remaining minority interest is a 10% stake in the Group’s Bangka estate.
The group funded the purchase from its existing cash reserves. The transaction increases the group's effective ownership by over 1,700 hectares, or 4%, in its high-quality planted areas, and is expected to be earnings enhancing.
"This acquisition is yet another step forward in the group's strategy, securing 100% ownership in almost all our estates to the benefit of all group shareholders," said MP Evans chairman, Peter Hadsley-Chaplin.
"Robust yields and strong extraction rates from these properties will continue to support the group's priority to deliver progressive returns.
"We are most grateful to Praba Madhavan for his support to the Group as our local partner in Indonesia in recent years and wish him well for the future."