By Joe Hoppe

R.E.A. Holdings PLC said Thursday that it has successfully completed discussions with its Indonesian bankers PT Bank Mandiri (Persero) Tbk to replace existing loans to its subsidiaries with larger facilities on lower interest rates.

The palm-oil producer said its PT Sasana Yudha Bhakti subsidiary, or SYB, and its PT Kutai Mitra Sejahtera subsidiary, or KMS, have secured loans worth 555 billion Indonesian rupiah ($38.9 million) and IDR365 billion ($25.6 million) respectively, both payable over eight years. These replace SYB's previous five-year IDR331 billion loan and KMS's one-year IDR123 billion loan.

The company said it has also secured a new working capital loan for SYB of IDR15 billion, renewable every year.

The interest rates on the new loans and working capital borrowings will be 8.75%, down from the previous rate of 9.75%.

The agreement is subject to technical conditions and is expected to be complete within weeks. Following completion, R.E.A. intends to open discussions with note holders of its 7.5% 2022 dollar notes, with a view to extend the maturity date by four years on terms it would be happy to repurchase.

Shares at 1036 GMT were up 3.5 pence, or 3.6%, at 100.0 pence.

Write to Joe Hoppe at joseph.hoppe@wsj.com