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R.E.A. Holdings sells subsidiary CDM to Teladan Prima Agro

Published 22/04/2025, 14:06
R.E.A. Holdings sells subsidiary CDM to Teladan Prima Agro
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LONDON - R.E.A. Holdings plc (LSE:RE.) has entered into an agreement to sell its subsidiary PT Cipta Davia Mandiri ("CDM") to Indonesian agribusiness PT Teladan Prima Agro Tbk ("Telen"), the company announced today. The transaction values CDM at approximately $23.8 million based on exchange rates as of December 31, 2024, and is expected to significantly reduce R.E.A. Holdings’ debt.

CDM, a wholly owned subsidiary of R.E.A. Holdings’ principal operating subsidiary, PT REA Kaltim Plantations, specializes in oil palm cultivation in East Kalimantan, Indonesia. The sale includes 9,784 hectares of fully titled land and an additional 5,454 hectares pending title completion.

The decision to sell CDM follows the resolution of longstanding disagreements with local villages over plasma plantings, which are cooperative schemes that benefit local communities. The sale is part of R.E.A. Holdings’ strategy to concentrate its operations geographically and focus on its core assets.

Telen, listed on the Indonesian Stock Exchange, manages and cultivates around 60,500 hectares of oil palm plantations and operates six palm oil mills. It also has a renewable energy business focused on generating electricity from palm oil waste.

The transaction is subject to certain conditions, including the capitalization of a $7.7 million loan from REA Kaltim to CDM and the consent of Bank Mandiri, which has provided loans to CDM. The completion date is targeted for June 4, 2025.

Financially, the sale will strengthen R.E.A. Holdings’ balance sheet by reducing its net indebtedness, which was $159.3 million as of December 31, 2024. The proceeds from the sale will be used by REA Kaltim to repay bank borrowings.

The board of directors believes the sale is in the best interests of the company’s shareholders and securities holders. The information in this article is based on a press release statement.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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