Shares in R.E.A. Holdings have experienced a significant rise following the announcement of increased cash resources. The company expects these additional funds, obtained through a series of transactions and investments, to enable the payment of dividend arrears on preference shares as well as ensure sufficient funds for repayments.
Strong Performance Boosts Shares
As of 0909 GMT, shares have climbed by 9 pence, or 15%, reaching 68 pence. This positive market response reflects investor confidence in R.E.A. Holdings’ future prospects.
Expansion Plans with Indonesia’s DSN Inc.
R.E.A. Holdings, a palm-oil producer listed on the London Stock Exchange, has recently agreed to a proposed investment of $50 million with Indonesia’s DSN Inc. This investment is in the company’s main operating subsidiary, REA Kaltim. As a result of this transaction, DSN Inc.’s participation will increase from 15% to 35%. Furthermore, it is expected that DSN Inc. will gradually raise its stake in REA Kaltim to 49% by June 30, 2028.
Sale of Subsidiary PT Cipta Davia Mandiri
In addition to the investment agreement with DSN Inc., R.E.A. Holdings has announced the proposed sale of its subsidiary PT Cipta Davia Mandiri (CDM). The valuation of the CDM business stands at $25 million. With this sale, R.E.A. Holdings has granted DSN Inc. priority rights to acquire CDM. The subsidiary specializes in oil palm cultivation in East Kalimantan, Indonesia.
Enhanced Financial Position
R.E.A. Holdings anticipates net proceeds of approximately $75 million from these transactions and investments. As a result, net debt is expected to decrease to around $110 million, enhancing the company’s balance sheet and overall financial position.
Streamlined Subsidiaries for Operational Efficiency
The company plans to utilize this opportunity to streamline its group subsidiaries. By doing so, R.E.A. Holdings aims to focus on its remaining core plantings, ultimately achieving operational efficiencies.