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DekelOil (LON:DKL) said its debt has reduced by €5.1mln, improving the economics of its 51%-owned Ayenouan palm oil project in Cote d'Ivoire.
It follows the cancellation of a capital note signed with Biopalm, which owns the other 49% of Ayenouan.
The agreement means Biopalm won’t now have to find a €1.1mln equity contribution to the project and remains at 49% of Ayenouan.
The note carried an annual coupon of 10%.
Director Lincoln Moore said the debt deal “unlocks significant value for shareholders”.
“With profits on an upwards trajectory, and the palm kernel oil plant now in operation, the board will continue to take full advantage of the excellent progress made on the ground to date to further strengthen our balance sheet so that it more fully reflects DekelOil's status as a growing palm oil producer rather than a pure project development company," he added.
The shares, up 25% in the year to date, gained a further 9% in morning trade to 1.25p.
Broker Cantor Fiztgerald said: “While in theory DekelOil loses outstanding capital contributions from the minority, we had not included these in our forecasts so there is an overall increase in value.”
Restating its ‘buy’ advice, Cantor said the stock was worth 2p a share, up from 1.75p previously.