26/10/2012 (The Star) - TH Plantations Bhd is buying two companies with plantation land in Sarawak for RM254.59mil, which will, together with an earlier acquisition made in July, more than double its land bank to 97,592ha from 44,933ha and increase its total planted area of oil palms by more than 50% to 59,229ha from 38,154ha currently.

The company said in a filing with the stock exchange that it has signed a share sale agreement with Weida (M) Bhd, Enerstar Sdn Bhd, Liew Tien How, and Bong Sen Kui for the purchase of Bumi Suria Ventures Sdn Bhd for RM212.5mil as well as a separate agreement with Weida for Maju Warisanmas Sdn Bhd costing RM42.08mil.

They collectively own 6513.8ha of land in Sawarak, of which 5,424ha is planted with oil palm.

“The proposed acquisitions represent a strategic move to further solidify the group’s footprint in Malaysia which is in line with its target to acquire plantation land bank at strategic locations to complement existing growth strategy.

“The proposed acquisitions would also improve the age profile of TH Plantations’ palms as the plantation lands to be acquired consist of a mixture of immature and young mature palms, which will provide a steady revenue stream to the group in the medium term,” it said.

The firm added that the price was arrived at on a willing-buyer willing-seller basis taking into consideration the market value of the land and oil palm estate of RM360mil as appraised by CH Williams Talhar Wong & Yeo Sdn Bhd and the adjusted net assets of the target companies of RM271.08mil.

“Further, the group will not be required to undertake asset rehabilitation or asset replacement due to the availability of well-constructed infrastructure coupled with a host of new fleet of vehicles and equipment.

“In view of the above, the board believes that the profit contribution from the acquiree companies will grow in line with higher fresh fruit bunch yield per ha as and when the oil palms of the estate reach their prime age,” it said.

Kuching, Sarawak-based Weida, an engineering solutions concern, also said in a statement that the sale would raise proceeds of RM151.37mil and a net gain of some RM121.15mil, which would enable it to realise its investments as well as pare down debt.

“The proposed disposals will allow the Weida Group to re-align its business activities to focus on its other core businesses,” it added.

The bulk of the proceeds or RM96.62mil will go to working capital, RM50mil to debt repayments and the rest to expenses incurred in relation to the sale.

Meanwhile, Alliance Investment Bank, the independent adviser for TH Plantations’ acquisition of 100% of TH Ladang (Sabah & Sarawak) for RM518mil and 70% of TH Bakti Sdn Bhd for RM17.64mil, said yesterday the proposal was “fair and reasonable” and not detrimental to the firm’s non-interested shareholders.

“Accordingly, we recommend that the non-interested shareholders of TH Plantations vote in favour of the resolution pertaining to the proposed acquisitions to be tabled at the forthcoming EGM of the company,” it said in an announcement to Bursa Malaysia.