REG-R.E.A. Holdings plc R.E.A. Holdings plc: Proposed reduction of capital

R E A HoldingsAnnouncement

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   R.E.A. Holdings plc (RE.)
   R.E.A. Holdings plc: Proposed reduction of capital

   17-Sep-2025 / 07:05 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

   17 September 2025

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

   Proposed reduction of the capital of R.E.A. Holdings plc by way of a
   reduction of of the amount standing to the credit of the company's share
   premium account by $20,000,000

   Introduction

   The company  announces  that  it  is today  despatching  a  circular  (the
   "circular") to the  holders of  its ordinary shares  and, for  information
   only, to  the  holders of  its  preference  shares, giving  details  of  a
   proposal for  a reduction  of  the capital  of the  company  by way  of  a
   reduction of  $20,000,000 of  the amount  standing to  the credit  of  the
   company's share premium account.

   Such proposal requires, inter alia, the approval of shareholders given  by
   way of  a  special resolution.   Accordingly,  a general  meeting  of  the
   company has been convened for 22  October 2025.  Notice of the meeting  is
   included in  the  circular.   The necessary  special  resolution  will  be
   proposed at such meeting.

   Background to and reasons for the proposed reduction of capital

   The company is permitted by law to pay dividends on its shares only out of
   distributable reserves.  The level of distributable reserves shown by  the
   balance sheet of the company  at 31 December 2024  (being the date of  the
   latest audited  balance sheet  of the  company) amounted  to $8.0  million
   (being the  amount  standing  to  the credit  of  the  company’s  retained
   earnings account, which constitutes a distributable reserve).  The company
   requires distributable reserves of some $8.8 million to meet the aggregate
   annual preference dividend  payable in  respect of  the preference  shares
   before even considering the payment of any dividend to the holders of  the
   ordinary shares.

   The company has, however,  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 company's share  premium account was  $47.4
   million.  As the share premium account is not a distributable reserve,  it
   has limited application and cannot be used to pay dividends.

   The board  therefore  proposes that  the  company should  proceed  with  a
   reduction of  capital to  create additional  distributable reserves.   The
   board proposes that the amount standing to the credit of the share premium
   account be  reduced  by  $20,000,000, with  the  $20,000,000  of  realised
   profits thereby created being applied  to increase the accumulated  profit
   on the company’s  retained earnings  account (the  "proposed reduction  of
   capital").

   By undertaking the proposed reduction  of capital and creating  additional
   distributable reserves,  the  company will  increase  its ability  to  pay
   dividends, subject always  to the financial  performance of the  company. 
   The increased distributable  reserves would  also be  available for  other
   returns of value to shareholders in  the coming years.  However, save  for
   the payment  of dividends  in  respect of  the  preference shares,  and  a
   possible resumption  of  ordinary  dividends  in  years  where  internally
   generated cash  flows are  sufficient to  effect a  material reduction  in
   group net debt,  the board currently  has no plans  to use the  additional
   distributable reserves that will  be available to  the company should  the
   proposed reduction of capital take place.

   If the  proposed reduction  of  capital were  not  to be  undertaken,  the
   company  would  be  reliant  upon  the  receipt  of  dividends  from   its
   subsidiaries to  provide the  distributable reserves  needed in  order  to
   permit the company to make dividend payments.  The terms of the loans made
   by PT Bank Mandiri (Persero) Tbk (the Indonesian State bank providing loan
   facilities to the Indonesian operating companies within the group)  ("Bank
   Mandiri") to PT REA Kaltim  Plantations ("REA Kaltim") include  provisions
   requiring that  REA Kaltim  obtain  the consent  of  Bank Mandiri  to  any
   proposed dividends.  Whilst the  board has no reason  to expect that  Bank
   Mandiri would refuse to consent to the payment by REA Kaltim of  dividends
   that are proportionate to REA Kaltim's  earnings, were Bank Mandiri to  do
   so, this would  be likely to  result in  the company finding  itself in  a
   situation where it has the cash resources to pay a dividend but is  unable
   so to do due to insufficient distributable reserves.

   Further details of the proposed reduction of capital

   In addition  to  requiring  the approval  of  shareholders,  the  proposed
   reduction of  capital is  subject to  confirmation by  the High  Court  of
   Justice in England and Wales (the "Court").

   If the special resolution is passed,  the company intends to apply to  the
   Court for the necessary confirmation.   The proposed reduction of  capital
   will only become  effective if  the special  resolution is  passed at  the
   general meeting, the  Court confirms the  reduction and the  order of  the
   Court confirming the  reduction is  delivered to, and  registered by,  the
   Registrar of Companies in England and Wales.

   Provisional dates have been obtained  for the required Court hearings  for
   the purposes of the proposed reduction of capital, but they are subject to
   change.  If the hearings proceed as scheduled, the final hearing, at which
   the company  will request  that the  Court make  an order  confirming  the
   reduction, is currently expected to take  place on 11 November 2025.   The
   company will notify  shareholders when the  proposed reduction of  capital
   has become  effective  by issuing  an  announcement through  a  Regulatory
   Information Service.

   In considering an application by the  company for an order confirming  the
   proposed reduction of capital,  the Court will need  to be satisfied  that
   there is no real likelihood that the reduction will 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.  In order to  satisfy the Court, the  company
   may seek the consent of certain of its creditors to the proposed reduction
   of capital.   It  is for  the  Court  to determine  whether  any  creditor
   protection is required and, if so,  what form that should take.   However,
   given the  substantial  net  assets  of the  group,  the  board  does  not
   anticipate that any such creditor protection measures will be required.

   The holders of  the 7.5 per  cent dollar  notes 2028 of  the company  have
   already consented  to the  proposed  reduction of  capital  by way  of  an
   extraordinary resolution passed by them on 4 September 2025.  In addition,
   the trust  deed  constituting the  dollar  notes now  contains  provisions
   pursuant to which  the trustee  for the holders  of the  dollar notes  has
   irrevocably consented, on behalf of itself  and the holders of the  dollar
   notes, to  the  proposed  reduction  of capital  and  to  the  release  to
   distributable reserves of the reserve  that would thereby be created.   If
   necessary, the company may  seek to obtain  similar consents from  certain
   other of its material creditors to whom obligations are owed that will not
   fall due for discharge  within a short period  following the reduction  of
   capital taking effect.

   The board reserves the right to abandon or discontinue any application  to
   the Court for  confirmation of the  proposed reduction of  capital if  the
   board  believes  that  the  terms  required  to  obtain  confirmation  are
   unsatisfactory to  the  company  or  if,  as  the  result  of  a  material
   unforeseen event, the board considers  that to continue with the  proposed
   reduction of capital would be inappropriate, inadvisable or otherwise  not
   in the best interests of the company.

   Recommendation

   Each of the directors of the company  is of the opinion that the  proposed
   reduction of  capital is  in the  best interests  of the  company and  its
   shareholders as a whole.

   Accordingly, the board recommends that  all ordinary shareholders vote  in
   favour of the special resolution set out in the notice of general  meeting
   of the company convened for 22 October 2025 as the directors intend to  do
   in respect  of  their  own  holdings  comprising,  in  aggregate,  705,140
   ordinary shares (representing 1.6 per cent of the voting share capital  of
   the company).   Richard Robinow  also intends  to vote  in favour  of  the
   special resolution in respect of the 24,167 ordinary shares  (representing
   0.055 per cent of the voting share capital of the company) held by him  as
   trustee.

   Emba Holdings Limited has confirmed that  it intends to vote in favour  of
   the special resolution in  respect of its  holding of 13,022,420  ordinary
   shares (representing 29.7  per cent  of the  voting share  capital of  the
   company).

   If the  special resolution  is not  passed  or if  the Court  declines  to
   confirm the proposed reduction  of capital, while  the company expects  to
   have sufficient  distributable reserves  to  pay the  dividend due  on  31
   December 2025 in respect of its preference shares, absent any augmentation
   of distributable reserves, the company does not currently have  sufficient
   distributable reserves to pay the preference share dividend due on 30 June
   2026, nor  any subsequent  preference share  dividends.  As  noted  above,
   whilst the board 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, which  dividends  would  increase  the
   distributable reserves of the company, there cannot be certainty that Bank
   Mandiri will grant its  consent.  Thus, absent  the proposed reduction  of
   capital, the company could  find itself in the  situation where the  group
   has the  profits and  cash resources  to make  dividend payments  but  the
   company is unable to make those payments due to the fact that it does  not
   have the necessary distributable reserves.

   If the dividends payable to the  holders of the preference shares were  to
   become in arrear for a period of more than six months, the holders of  the
   preference shares  would become  entitled to  attend and  vote at  general
   meetings of the company.

    

   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:          GB0002349065
   Category Code: CIR
   TIDM:          RE.
   LEI Code:      213800YXL94R94RYG150
   Sequence No.:  401995
   EQS News ID:   2198372


    
   End of Announcement EQS News Service

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