Small Talk: Asian Plantations to bring palm oil to Aim
Monday 30 November 2009
This newspaper has done a sterling job in the last few months highlighting the destruction that is being done to many of the world's rainforests so we can all consume more palm oil.
The oil, which is predominantly produced in Malaysia and Indonesia, is used in a whole range of foods, such as bread, biscuits and breakfast cereal. In order to harvest the stuff, vast tracts of rainforest are being chopped down, further endangering the existence of a number of protected species.
Asian Plantations, a palm-oil group that hopes to start producing in about a year's time, will list on the Alternative Investment Market (Aim) today, and says that it is doing all it can to protect the Malaysian environment where it operates, farming only on land designated for agriculture.
Certainly investors had no qualms about the group, after it raised £5.26m through the IPO, selling 23.7 per cent of the company's equity. Joint chief executive Graeme Brown, says that all the money will go into buying new land, adding that, "palm oil is expected to provide up to two-thirds of the growth in worldwide vegetable oil production over the next ten years. With strong growth in China and India combined with health concerns surrounding trans-fatty acids in the developed markets, the outlook for the group is exciting. The listing on AIM provides an opportunity for investors to benefit from these key drivers, while investing in the sector at a significant discount to its established peers. With the first harvest expected within 12 months and further potential land-acquisition opportunities available, the group is well positioned to become a significant producer of palm oil in the short to medium term."
Mr Brown and his fellow joint chief executive, Dennis Melka, have promised to complete at least one acquisition within six months of today's IPO and to pursue further opportunities to increase the "plantable" area to in excess of 20,000 hectares within two years.
First blood to Passport
Regular readers of this column will know all about the increasingly personal spat between the management of JSM Indochina, an Aim-listed property-investment group, and one of its biggest shareholders, the Californian investment fund, Passport Capital.
The main event, an EGM, takes place on 7 December when the shareholders will consider Passport's request to remove certain board members, and install others proposed by the American investors. And it is Passport that has taken the honours (in this thoroughly dishonourable episode) in early sparring. One of Passport's main beefs was that the chief executive, Craig Jones, had broken promises regarding the timing of investments following the company's IPO in 2007, and it was keen that Mr Jones, who describes himself as "just a guy in the pub", left the board.
Mr Jones, who with 14.5 per cent of the stock is a bigger individual shareholder than Passport, which has 13 per cent, resigned from the board last Thursday, but will stay on managing the group's investment portfolio. A spokesperson for Mr Jones claimed that the resignation was designed to ease tension, although it is hardly a sign of confidence in the strength of his argument, which will be tested at the EGM.
Passport will presumably not get the support of Mr Jones at the EGM. JSM's now former boss says the Asian property market has flagged, and Passport's interests and those of other investors are best served by a conservative approach. And anyway, he adds, only $40m of the IPO money has yet to find its way into investments.
Passport refutes Mr Jones's counter-claim that it wants to take over the group, but admits it wants nominate its own directors. If handing out whatever cash is left on the balance sheet to shareholders is the best way forward, so be it, Passport says.
Indian Energy set for boost from extra wind-power tariff
Indian Energy, the India-focused renewable-energy group, is likely to get a boost when the Indian Government announces the introduction of the 'Generation Based Incentive' scheme for independent power producers in wind-power projects, which is expected as soon as this week. The scheme will provide wind power projects selling electricity to the grid with an additional tariff of 0.5 rupees per kilowatt per hour of power. The additional tariff is expected to provide Indian Energy with a "significantly increased" revenue for future projects, the group has said.
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