SHARE-ACQUISITION: Sarawak Oil Palm director Hasbi Suhaili (third right) exchanging of documents with Shin Yang Group director Ling Chiong Ping (third left), while witnessed by Tan Sri Datuk Ling Chiong Ho (centre).
KUCHING: Sarawak Oil Palm Bhd (Sarawak Oil Palm) yesterday announced the proposed acquisition of the remaining 40 per cent and 35 per cent equity interest not already held by the company in SOP Plantations (Beluru) Sdn Bhd (SOP Beluru) and SOP Plantations (Kemena) Sdn Bhd (SOP Kemena) from Shin Yang Holdings Sdn Bhd.
The proposed acquisitions were for a cash consideration of RM122.40 million for SOP Beluru and RM120.10 million for SOP Kemena.
According to an announcement by Sarawak Oil Palm, the proposed acquisition involved the acquisition of the remaining 15,999,9999 ordinary shares of RM1 each in SOP Beluru and 10,500,000 ordinary shares in SOP Kemena.
“Following the completion of the proposed acquisitions, both acquiree companies would be wholly-owned subsidiaries of Sarawak Oil Palm.
“The total purchase consideration shall be funded via RM100 million bank borrowings with the remaining RM42.50 million from the company’s existing cash and bank balances,” the announcement indicated.
The company added that the proposed acquisitions were expected to provide Sarawak Oil Palms with the opportunity to expand its equity participation and ownership in the palm oil-related activities in Sarawak by increasing its shareholdings in the acquiree companies.
The properties in SOP Kemena and SOP Beluru were noted to be a mixture of immature and young mature oil palms with the age of one to five years which Sarawak Oil Palm expected would improve its tree age profile.
On the outlook of the palm oil industry in Malaysia, Sarawak Oil Palms highlighted that the total oil palm planted areas increased by 4.3 per cent to five million hectares with the opening of new areas mainly in Sabah and Sarawak.
“Of the total planted areas, 28.8 per cent or 1.4 million hectares are located in Sabah, contributing approximately 31 per cent to overall total production of crude palm oil,” the company added.
Seeing that oil palm remained one of the main drivers of Malaysia’s agriculture sector, accounting for 71 per cent of its agricultural land bank, the palm oil industry was forecasted to grow at 7.1 per cent over the next 10 years, driven by further gains in average productivity of fresh fruit bunch yield and oil extraction rate, new plantation expansion abroad, among others.
As such, Sarawak Oil Palm believed that the acquisitions would deliver favourable results, in line with the company’s direction to expand its palm oil plantation business and enhane future earnings contribution to the group.