Equatorial Palm Oil secures further loan for Liberian JV to develop mill
Equatorial Palm Oil's Liberian Palm Developments joint venture has agreed a loan of up to $30m with KLK Agro Plantations, a wholly owned subsidiary of Kuala Lumpur Kepong Berhad, it was announced on Thursday.
According to EPO, which owns 50% of the joint venture, the five-year loan would primarily be used to develop LPD's operations and finalise the construction of the first stage of the new palm oil mill on its Palm Bay estate, as announced in April 2016.
The loan which carries interest of three-months dollar LIBOR plus 5.0% per annum, is on predominantly similar terms as the loans of $20.5m and $30m provided by KLK Agro, as previously announced on 27 January 2015 and 5 September respectively.
EPO added that these existing loans had been fully drawn down and remain outstanding, to be paid back by 25 January 2020.
The new loan could be drawn down by LPD in line with its operational funding requirements and pendent on the consent of the KLK Agro.
Construction of the Pam Bay palm oil mill was "progressing well", with the first module expected to be commissioned and begin full operation in the third quarter of 2018, sending oil 24km to the port of Buchanan where EPO has leased close to 4.5 acres for a tank farm and export facility.
Geoffrey Brown, executive director of EPO, was optimistic about the funding stimulating operations into production.
"This funding from KLK Agro will drive our operations into production in the latter part of 2018," he said, with the commissioning of the palm oil mill "a very significant milestone" for the company and local communities.