Sime units on track for listing after EGM vote

Sime Darby Group is looking forward to a successful listing of its pure plays, namely Sime Darby Plantation Bhd and Sime Darby Property Bhd on Nov 30.

The conglomerate received a resounding shareholders’ approval for the demerger of Sime Darby Bhd at its extraordinary general meeting (EGM) yesterday, with a 99% approval vote.

Not overly worried about Moody’s rating on the lower valuation for Sime Darby after the discontinuation of its property and plantation operations, Sime Darby group chief financial officer Datuk Tong Poh Keow ( pic) said the group is well prepared for that.

The initial Moody’s rating given was for Sime Darby as a conglomerate.

Hence, the downgraded rating is in line with Sime Darby’s current composition of operations.

“As you take away the companies that generate the most cash, the ratings have to be reviewed.

“I think we are still an investment-grade rating, though we will review the necessity of having that rating going forward.

“We do not have any capital market programme, so the necessity to get the rating or maintain it will be subjected to the new management -- it will be up to them to decide,” she explained.

Tong added that the rating obtained for Sime Darby Plantation was similar to the rating of Sime Darby when the conglomerate got its first rating.

Sime Darby’s rating was obtained when the group issued a multi-currency sukuk in the capital market.

In addition, rating agencies have their own criteria and methodology when ascribing ratings to companies, such as the financial matrix and business model.

On the sidelines of the group’s AGM and EGM, Sime Darby Property managing director Datuk Seri Amrin Awaluddin said the move to freeze approvals for luxury property developments priced over RM1mil is still premature at this juncture, seeing that the announcement was just made over the weekend.

“As an industry player, we are still waiting for more clarification to really understand the situation.

“We will need to get more info before we can assess the situation.

“There are pros and cons to this move, as it could come in handy for properties in certain locations,” he said.

Meanwhile, Sime Darby Plantation is one of the plantation companies that will be exporting Roundtable on Sustainable Palm Oil (RSPO)-certified palm oil to the European Union (EU) by year-end.

This will be the first RSPO-certified palm oil shipment to the EU by the four largest plantation companies in Malaysia, namely, Sime Darby Plantation, Kuala Lumpur Kepong Bhd, IOI Corp Bhd and Felda Global Ventures Holdings Bhd.

Sime Darby Plantation CEO Datuk Franki Anthony Dass said the company’s palm oil export to the EU was minimal, considering that an estimated 60,000 tonnes of crude palm oil is locally taken up each year, and Sime Darby Plantation is currently expanding its production to 130,000 tonnes annually.