REG-R.E.A. Holdings plc R.E.A. Holdings plc: Proposals re 7.5 per cent dollar notes 2026

R E A HoldingsAnnouncement

11/08/2025 08:00

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   R.E.A. Holdings plc (RE.)
   R.E.A. Holdings plc: Proposals re 7.5 per cent dollar notes 2026

   11-Aug-2025 / 08:00 GMT/BST

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   NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY
   OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD
   CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT
   JURISDICTION

   For immediate release

   11 August 2025

   R.E.A. Holdings plc (the "company")

   Proposals (a) to extend the redemption date for the 7.5 per cent dollar
   notes 2026 issued by the company from 30 June 2026 to 31 December 2028 and
   (b) to seek the consent of the holders of the dollar notes to a possible
   reduction of the capital of the company by way of a reduction of up to
   $20.0 million of the amount standing to the credit of the company's share
   premium account

   Introduction

   In its annual report published on 17 April 2025, the company announced a
   proposal to improve the maturity profile of its debt by inviting holders
   of the $27.0 million nominal of 7.5 per cent dollar notes 2026 issued by
   the company (the "dollar notes") to roll over their dollar notes to 31
   December 2028.

   The company now announces that it is today despatching a circular (the
   "circular") to the holders of the dollar notes ("noteholders") giving
   details of, and seeking the approval of noteholders, to be given by way of
   an extraordinary resolution to be proposed at a general meeting of
   noteholders convened for 4 September 2025, as regards such proposal.

   At the same time as seeking the approval of noteholders to the proposed
   extension of the redemption date for the dollar notes, the opportunity is
   being taken to seek the consent of noteholders to a possible reduction of
   the capital of the company by way of a reduction of the amount standing to
   the credit of the company's share premium account. The notice of general
   meeting included in the circular includes a further extraordinary
   resolution to this end.

   Background to and reasons for the proposed extension of the redemption
   date for the dollar notes

   As previously announced, 2024 saw a marked improvement in profitability of
   the group's operations, with higher selling prices more than offsetting
   the lower than expected production volumes that were reportedly widespread
   across the palm oil industry in Indonesia. A significant reduction in
   estate operating costs also made a meaningful contribution to the group's
   results. In addition, good progress was made throughout the year in
   bringing both the stone and sand operations to commercial production.

   The 2024 improved trading performance was accompanied by a material
   reduction in group net indebtedness with the subscription by a subsidiary
   of PT Dharma Satya Nusantara Tbk of $53.6 million for additional shares in
   PT REA Kaltim Plantations ("REA Kaltim"). To date during 2025, net
   indebtedness has further benefitted from completion of the sale by the
   group of PT Cipta Davia Mandiri in early June. Additionally, loan funding
   provided by PT Bank Mandiri (Persero) Tbk ("Bank Mandiri") to the
   Indonesian operating companies within the group has been repackaged and
   increased on a basis that improves the maturity profile of the group's
   debt.

   Prepaid sales advances from customers were reduced during 2024 from $17.1
   million to $8.0 million and the group aims to eliminate all remaining such
   advances by the end of 2025.

   Whilst the group acknowledges the need to continue reducing its net
   indebtedness, it wishes to ensure an orderly reduction that does not place
   strain on the group's liquidity. The group has in hand the cash resources
   to meet the redemption of the outstanding balance of £21.4 million of the
   sterling notes which falls due on 31 August 2025, and will redeem such
   notes on that date. However, redemption of the outstanding $27.0 million
   of dollar notes on the due date of 30 June 2026, when coupled with group
   bank debt repayments falling due in 2026 of $20.0 million, would result in
   a further outflow of cash during 2026 that would be disproportionate to
   the group's internal cash generation. Accordingly, the group would prefer
   to phase the redemption of the dollar notes over a longer period. The
   proposed extension of the redemption date for the dollar notes and
   attendant sale facility have been formulated with that objective.

   Roll-over fee

   In consideration of, and subject to, noteholders sanctioning the proposed
   extension of the redemption date for the dollar notes, the company will
   pay to those noteholders on the register of noteholders at 6.00 p.m. on 3
   September 2025 ("qualifying noteholders") who have not elected to take
   advantage of the sale facility (details of which are set out below)
   (whether or not such noteholder voted in favour of the extraordinary
   resolution sanctioning the extension but only if the extension becomes
   effective) a roll-over fee in an amount equal to:

   (1% + 2A) x B

   where:

   A is the percentage amount (if any) by which the 180 day Average Secured
   Overnight Financing Rate published by the Federal Reserve Bank of New York
   on 23 June 2026 exceeds 4.5 per cent (and nil if such rate does not exceed
   4.5 per cent); and

   B is the nominal amount of dollar notes held by the qualifying noteholder
   at 6.00 pm on 3 September 2025.

   Provided that the proposed extension of the redemption date for the dollar
   notes has become effective, the roll-over fee will be paid in cash on 30
   June 2026.

   The roll-over fee will be paid in dollars unless the relevant qualifying
   noteholder has already elected, in accordance with the terms and
   conditions attaching to the dollar notes, to receive interest in respect
   of the dollar notes in sterling, in which event the consent fee will be
   paid to that noteholder in sterling.

   Sale facility

   The directors are aware that the market in the dollar notes can be
   limited, and that not all noteholders may be willing to have the monies
   represented by their holdings of dollar notes tied up beyond 30 June 2026.
   Accordingly, in conjunction with the proposal to extend the redemption
   date for the dollar notes, the company is putting in place a sale facility
   whereunder, conditional upon the proposed extension of the redemption date
   for the dollar notes becoming effective, any qualifying noteholder who
   wishes to realise its holding of dollar notes on the current redemption
   date of 30 June 2026 will be able to do so.

   Any qualifying noteholder who wishes to take advantage of the sale
   facility is invited to contact R.E.A. Services Limited ("REA Services") in
   writing at 5th Floor North, Tennyson House, 159-165 Great Portland Street,
   London W1W 5PA or by email to companysecretary@rea.co.uk at any time on or
   after 1 May 2026 but by no later than 5.00 p.m. on 29 May 2026. REA
   Services will then either purchase the relevant dollar notes or arrange
   the purchase thereof by a third party, in either case at par for
   settlement on 30 June 2026 (that is, the current due date for redemption
   of the dollar notes). Any such sale will be subject to the provisions as
   regards the transfer of dollar notes included at Condition 3 attaching to
   the dollar notes (that is: (i) any election to sell must be in respect of
   a minimum amount of $120,000 nominal of dollar notes and (ii) where the
   election is in respect of part only of a holding of dollar notes, the
   transfer of the same must not result in the transferor retaining a minimum
   holding of less than $120,000 nominal of dollar notes represented, in the
   case of dollar notes held in certificated form, by one certificate).

   REA Services may seek to re-sell, over time, any dollar notes acquired by
   it pursuant to the sale facility. To the extent not so sold, REA Services
   intends to retain the dollar notes pending redemption of the same in
   accordance with their terms. There is no current intention that any dollar
   notes acquired by REA Services pursuant to the sale facility be
   surrendered for cancellation.

   Contemplated reduction of capital

   The company has built up a substantial capital reserve in its share
   premium account through the issue of shares at prices in excess of the
   nominal value of those shares. As at 31 December 2024, the amount standing
   to the credit of the share premium account was some $47.4 million. As the
   share premium account is an undistributable reserve, it has only limited
   application and cannot be used to pay dividends.

   As at 31 December 2024, the distributable reserves of the company amounted
   to approximately $8.0 million. The company requires distributable reserves
   of some $8.7 million to meet the annual preference dividend payable in
   respect of the preference shares before even considering any dividend to
   the holders of the ordinary shares.

   The terms of the loans made by Bank Mandiri to REA Kaltim and its
   subsidiaries include provisions requiring that REA Kaltim obtain the
   consent of Bank Mandiri to any proposed dividends. Whilst the group has no
   reason to expect that Bank Mandiri would refuse consent for the payment by
   REA Kaltim of dividends that are proportionate to REA Kaltim's annual
   earnings, were Bank Mandiri to do so, this might result in a situation in
   which the company had the cash resources to meet a proposed dividend but
   was unable to pay such dividend because it would not be covered by the
   company's distributable reserves.

   The directors are therefore currently considering the possibility of
   undertaking a reduction of capital by way of the reduction of the amount
   standing to the credit of the company's share premium account, up to a
   maximum amount of $20.0 million. Any such reduction of capital would not
   of itself involve the distribution or repayment of monies by the company,
   and would not reduce the underlying net assets of the company, but it
   would result in an amount equal to the amount of the reduction being
   credited to to the distributable reserves of the company.

   Any reduction of capital would be subject to the approval of shareholders
   of the company, given by way of the passing of a special resolution in
   general meeting, and also to confirmation by the High Court of Justice in
   England and Wales (the "Court"). In considering an application by the
   company for an order confirming a reduction of capital, the Court would
   need to be satisfied that there is no real likelihood that the reduction
   would result in the company being unable to discharge all amounts due by
   it, at the time of the reduction, to creditors (including contingent
   creditors) of the company when such amounts fall due. The Court may
   require measures to be put in place for the protection of such creditors,
   except in the case of creditors who have consented to the reduction.
   Noteholders are, of course, creditors of the company.

   The additional distributable reserves that would be created in the books
   of the company were the company to proceed with the contemplated reduction
   of capital would be available for the future payment by the company of
   dividends to its shareholders and for any other general corporate
   purposes, subject always to the financial performance of the company and
   to compliance by the company with any restrictions imposed by the Court.
   This would have the effect of reducing the likelihood of the company being
   prevented by legal, rather than commercial, constraints, from paying
   dividends (and in particular from paying the dividends payable in respect
   of the preference shares). Any such dividends would result in a diminution
   in the cash reserves of the company.

   It is likely that the decision as regards whether or not to proceed with
   the contemplated reduction of capital will be made in September 2025, when
   the half yearly results of the group become available. If the decision is
   to proceed, it is currently intended that a circular regarding the
   proposed reduction would be posted to shareholders concurrently with, or
   shortly after, the publication of the half yearly results (due to be
   published in the second half of September).

   To minimise the possibility of any need for a further meeting of
   noteholders at any such time, the directors are proposing to take the
   opportunity now to seek the consent of noteholders to the contemplated
   reduction of capital, subject only to the necessary confirmation of the
   Court and provided always that such reduction would not result in the
   company being in breach of the borrowing restriction set out in condition
   9 attaching to the dollar notes.

   Conditions

   The proposed extension of the redemption date for the dollar notes is
   conditional upon:

   i. the passing of the first and third extraordinary resolutions set out in
      the notice of meeting of the holders of the dollar notes included at
      the end of the circular; and
   ii. the execution of the applicable supplemental trust deed referred to in
       the third extraordinary resolution

   in each case by 31 October 2025.

   The sale facility is conditional upon the proposed extension of the
   redemption date for the dollar notes becoming effective.

   The consent of noteholders to the contemplated reduction of capital and
   the sanction of noteholders to amendments to the trust deed to incorporate
   express provisions as regards such consent is conditional upon:

   i. the passing of the second and third extraordinary resolutions set out
      in the notice of meeting of the holders of the dollar notes included at
      the end of the circular; and

   ii. the execution of the applicable supplemental trust deed referred to in
       the third extraordinary resolution

   in each case by 31 October 2025.

   Recommendation

   Each of the directors of the company is of the opinion that both:

   i. the proposed extension of the redemption date for the dollar notes,
      with the attendant sale facility; and

   ii. the proposal to seek, at this stage, the consent of noteholders to the
       contemplated reduction of capital

   are in the best interests of the company, its shareholders and the holders
   of the group's debt securities (including the dollar notes) as a whole.

   However, none of the directors considers it appropriate to make a
   recommendation to noteholders as to whether or not noteholders should vote
   in favour of all or any of the resolutions set out in the notice of
   meeting of the holders of the dollar notes convened for 4 September 2025
   and/or as to whether or not noteholders should elect to sell dollar notes
   pursuant to the sale facility. A decision as to whether or not to vote in
   favour of a resolution and/or as to whether or not to elect to sell
   pursuant to the sale facility will depend on the personal circumstances of
   each noteholder. Holders of dollar notes who are in any doubt as to what
   action they should take are recommended to consult their appropriate
   independent financial adviser duly authorised, if the holder is resident
   in the United Kingdom, under the  1 Financial Services and Markets Act
   2000 or, if the holder is not so resident, under the relevant applicable
   local law.

   Undertakings as regards voting

   Kuala  Lumpur   Kepong  Berhad,   holding   in  aggregate,   through   two
   subsidiaries, $17,570,000  nominal  of  the  $27,035,218  nominal  of  the
   outstanding dollar  notes, has  undertaken  to the  company that  it  will
   procure  that  its  subsidiaries  vote  in  favour  of  the  extraordinary
   resolutions to be proposed  at the meeting of  noteholders convened for  4
   September 2025, and will not elect to take advantage of the sale facility.

   Expected timetable

   A meeting of the holders of dollar notes has been convened for 4 September
   2025 to consider the three extraordinary resolutions as noted above, and
   to authorise and request the trustee for the noteholders to enter into a
   supplemental trust deed for the purposes of effecting the necessary
   amendments to the trust deed, and re-stating the same as amended.

   It is expected that the results of the meeting will be announced on 4
   September 2025 and that the extension of the redemption date for the
   dollar notes will become effective the same day.

   Enquiries:

   David Blackett       Carol Gysin

   Chairman             Managing director
                       
   R.E.A Holdings plc   R.E.A. Holdings plc

   Tel: 020 7436 7877   Tel: 020 7436 7877

    

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   Dissemination of a Regulatory Announcement that contains inside
   information in accordance with the Market Abuse Regulation (MAR),
   transmitted by EQS Group.
   The issuer is solely responsible for the content of this announcement.

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   ISIN:          GB00BD8BTF36
   Category Code: CIR
   TIDM:          RE.
   LEI Code:      213800YXL94R94RYG150
   Sequence No.:  398413
   EQS News ID:   2181850


    
   End of Announcement EQS News Service

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