Equatorial Palm Oil's 50% owned joint venture company, Liberian Palm Developments (LPD), has entered into a loan agreement of up to $30 million with KLK Agro Plantations, a wholly owned subsidiary of Kuala Lumpur Kepong Berhad (KLK), for the operations and funding for LPD.
The loan will be used to continue to develop the operations of LPD and finalise the construction of the first stage of the new 60 metric tonne palm oil mill being built on Palm Bay estate.
The loan is in addition to, and on predominantly the same terms as, the loans of $20.5m and $30.0m provided by KLK Agro on 27 January 2015 and 5 September 2016 respectively, save for the date of maturity being 11 October 2022.
The existing loans, which have now been fully drawn down and remain outstanding, fall due on 25 January 2020.
Equatorial Palm Oil said the construction of the 60 metric tonnes per hour (mt/hr) palm oil mill at Palm Bay estate is progressing well. The first 30mt/hr module is expected to be commissioned and commence full operation in Q3 2018.
Geoffrey Brown, executive director of Equatorial Palm Oil, said: "This funding from KLK Agro will drive our operations into production in the latter part of 2018. The commissioning of the palm oil mill, expected in Q3 2018, will be a very significant milestone not only for the company but also for the communities amongst whom we operate and for the Liberian Government."
At 8:11am: (LON:PAL) Equatorial Palm Oil PLC share price was +0.13p at 2.88p