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Equatorial Palm Oil chairman buys 50,000 shares

Published: 02:28 08 Oct 2010 AEDT

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Equatorial Palm Oil (LON:PAL) (‘EPO’) chairman Michael Frayne has bought 50,000 shares for 17.25p per share.

Frayne now owns 6.4 million shares, representing 5.62% of the company.

The Liberia-operating palm oil producer joined the AIM market with a £6.5m placing in February, and since then it has gone from strength to strength.

The company has the backing of a major Indian conglomerate, the Siva Group – via its BioPalm Energy subsidiary - which invested £5m in the company and agreed a significant US$60m joint venture.

Last month EPO released its interim results for the first six months to 31 June 2010, saying it is on schedule to start crude palm oil production by the end of 2010.

The company has made swift progress on the ground in Liberia.

An initial 5 tonne per hour (tpa) mill is currently being installed and it is and on schedule to start producing palm oil in Q4.

EPO has a large 169,000 hectare land position, covering three distinct areas - Palm Bay, Butaw and River Cess County. The company intends to plant 50,000 hectares of oil palm over the next ten years, taking production to 250,000 tonnes per annum (tpa).

The strategy also sees the scale of plantations double to 100,000 hectares in the longer term.   
 
The Palm Bay plantation has been the main priority, with 3,000 hectares of oil palm plantation nearing completion.

The company’s initial revenues will be derived from sales into the domestic market.

The new planting programme is underway with nurseries being established at Palm Bay and Butaw. EPO said it is taking delivery of seedlings every month and it has placed an initial order for 220,000 oil palm seeds.

The company’s financial figures reflect the company’s rapid progress and its expansion. For the six months period EPO reported a loss of £1.45m (H109: £515,000), including significant non-recurring costs relating to its listing and fund raisings.

On the 30th June 2010 the company had £7.6m in cash and net assets of £15.83m.

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