UNITED PLANTATIONS BUYS AGRI LAND
Acquisition will include palm oil mill, workers’ quarters and site office in Perak for RM413.57m cash
UNITED Plantations Bhd is acquiring seven parcels of agricultural land totalling 3,641.82ha in Perak from Pinehill Pacific Bhd for RM413.57 million in cash.
The acquisition, which will include palm oil mill, workers’ quarters and a site office, will be completed by the first quarter of next year.
United Plantations said the proposed acquisition was consistent with its plan to continue expanding landbank.
“The proposed acquisitions are expected to increase the group’s local plantation landbank by almost 10 per cent from 40,821ha to 44,463ha.
“This will increase the total landbank of the group (including the landbank in Indonesia of 18,663ha) to 63,126ha, from the current 59,484 ha,” said United Plantations in a filing to Bursa Malaysia yesterday.
United Plantations had entered into three conditional sale and purchase agreements with Pinehill Pacific group of companies, namely Pinehill Plantations (Malaysia) Sdn Bhd, Syarikat Kaum Melayu Hilir Perak Sdn Bhd and Tahir, Rozlan and Tasariff Sdn Bhd, for the acquisition.
“The proposed acquisition will not have any effect on the net asset and gearing of the group, as the proposed acquisitions will be satisfied entirely in cash and does not involve any issuance of new ordinary shares and borrowings in the group,” it added.
United Plantations expects the proposed acquisitions to contribute positively to its future earnings and earnings per share in the medium to long term.
Pinehill Pacific, which is listed on the Main Market of Bursa Malaysia, said the proposed disposal provided an opportunity to unlock and realise the value of its investments within its subsidiaries.
“Given the size, location, the remaining tenure and market value of the plantation assets, it is an opportunity to dispose of the plantation assets to United Plantations,” said Pinehill Pacific in a filing yesterday.
Proceeds raised from the proposed disposal are expected to be utilised for repayment of borrowings, funding the group’s existing oil palm plantation business in Indonesia and its working capital.