MP Evans purchases minority stakes in Indonesian subsidiaries

Palm oil producer MP Evans has purchased a 5% minority holding in the majority of its Indonesian subsidiary trading companies.

MP Evans said on Monday that the acquisition, made by its wholly-owned PT Evans Indonesia subsidiary, encompasses the 5% shareholdings in its estates at Kota Bangun, the Pangkatan group, Bumi Mas, Musi Rawas and Simpang Kiri held by Praba Madhavan PA Madhavan.

The AIM-listed group noted that following the transaction, the only remaining location in which there was a minority interest was its estate at Bangka, where it has a 10% minority partner.

MP Evans stated the total cost of the purchase was $14.0m, based on an agreed price of $9,000 per planted hectare and was funded from existing cash resources. Also of note, MPE said its minority partner used the majority of proceeds to repay an outstanding $8.0m loan from the group and, as a result, the net cash outflow to the group resulting from the transaction was $6.0m.

Chairman, Peter Hadsley-Chaplin said "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. 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."

As of 1020 BST, MP Evans shares were up 1.62% at 865.80p.

Reporting by Iain Gilbert at Sharecast.com