R.E.A. Holdings subsidiary proposes amendments for 9½% sterling notes

By Jennifer Chiou

New York, Aug. 12 - R.E.A. Holdings plc announced that wholly owned subsidiary REA Finance BV will convene a meeting on Sept. 9 for proposed amendments to holders of the company's 9½% guaranteed sterling notes due 2015/2017.

REA Finance is asking holders to approve the following changes:

• The restructuring of the security for the notes via the assignment by REA Finance to R.E.A. Services Ltd. of all rights that REA Finance has in relation to loans to two Indonesian subsidiaries; and

• The addition of R.E.A. Services as a guarantor of the sterling notes.

According to a company release, this would involve amendments to the trust deed.

The company is also looking to change the terms of the Indonesian debtor subsidiary loans. Historically, interest payments made to REA Finance on these loans have been subject to an Indonesian withholding tax of 10%. Effective Jan. 1, 2010, the rate was increased to 20%. If approved, the rate would revert to 10%.

London-based R.E.A. Holdings' principal activities are the cultivation of oil palms and the production of crude palm oil in the Indonesian province of East Kalimantan.

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