Sime Plant eyes Ruchi Soya as Q2 net rises 35pc
Company also looking to sell minority stake in NBPOL, says Bakke
SIME Darby Plantation Bhd (Sime Plant) is keen to buy into India’s Ruchi Soya Industries Ltd. It was also looking to sell a minority stake in New Britain Palm Oil Ltd (NBPOL) to an investor in Papua New Guinea, said its deputy executive chairman and managing director Tan Sri Mohd Bakke Salleh at a briefing, here, yesterday.
Ruchi Soya, which is listed on the Bombay Stock Exchange, is India’s largest supplier of edible oil. It has a 19 per cent market share in the country.
Two months ago, debt-ridden Ruchi Soya was ordered to file for bankruptcy and was put up for sale.
Last night, India’s CNBC-TV18 reported that Sime Plant was one of the suitors for Ruchi Soya.
The other global agri-business players keen to rescue Ruchi Soya are Adani Wilmar Ltd, Godrej Agrovet Ltd, Patanjali Ayurved Ltd, Emami Ltd, Cargill India Pvt Ltd, ADM Agro Industries India Pvt Ltd and Indonesia’s Musim Mas Group.
Bakke confirmed that Sime Plant was keen on Ruchi Soya.
On how much it was willing to pay for Ruchi Soya, he said: “We are in early talks, so we are not able to reveal the details.”
On NBPOL, Bakke said the group was hopeful of selling a minority stake to a strategic investor.
“When Sime Darby bought into NBPOL in 2015, our intention was to only hold a controlling stake of between 51 and 60 per cent.
“This aspiration still holds as we seek to sell a minority stake in NBPOL. We hope to secure a strategic investor for NBPOL, preferably from Papua New Guinea.”
Analysts said Sime Plant could reap some RM3 billion and reduce its gearing level if it sold up to a 49 per cent stake in NBPOL.
Meanwhile, the company’s net profit jumped 35 per cent to RM429 million in the second quarter ended December 31 last year from RM319 million previously, thanks to higher palm oil prices and lower financing cost.
Quarterly revenue rose four per cent to RM4.09 billion from RM3.93 billion a year earlier.
Bakke said earnings for the year ending June would be satisfactory on good production of oil palm fruits at its estates across Malaysia, Indonesia and Papua New Guinea.
On the palm oil price outlook, Bakke said it was likely to trade between RM2,500 and RM2,600 per tonne in the months ahead.
He cautioned that currency fluctuations and production volume of rival vegetable oils would greatly influence price movements.
On Sime Plant’s succession plan, Bakke said: “I am due to retire next year and the board is looking at suitable candidates to succeed me.”