Priceworth extends FMU5 cash option

KOTA KINABALU: Priceworth International Bhd has extended its cash option to acquire timber concession area FMU5 in Sabah at a discounted RM235 million until 31 July 2018.

The sustainable forest management group yesterday signed a supplemental letter to extend the cash option with vendor Transkripsi Pintar Sdn Bhd in respect of the October 2016 sale and purchase agreement to buy Forest Management Unit 5 (FMU5).

The cash option represents a discount of RM25 million on the original RM260 million purchase price for FMU5 to RM235 million, which has been valued at RM433.8 million.

FMU5 is a sustainable forest management concession with a net concession area of 88,920 ha of commercial Class II forest in Sabah’s Trus Madi forest reserve.

Meanwhile, the group reported a 300 percent year-on-year jump in log production in May 2018 to 33,635.62 cubic metres, from 8,375 cubic metres in the corresponding month last year. This represents a new high arising from contribution from operations in FMU5.

Priceworth saw its ninemonth net profit surge six times to RM10.3 million, citing the stable supply of timber from FMU5 has the reason the group has exceeded its break-even point.

Priceworth is acquiring FMU5 through its Singapore subsidiary GSR Pte Ltd, which will also be acquiring sister company Sinora Sdn Bhd, Priceworth’s plywood manufacturing arm. The group is also planning an initial public offer of GSR on the Singapore Exchange.