MARKET DEVELOPMENT
Pontian Purchase Price For RM1.2 Billion Reasonable, Says FGV CEO
Pontian Purchase Price For RM1.2 Billion Reasonable, Says FGV CEO
03/10/2013 (Bernama) - Felda Global Ventures Holdings Bhd's (FGV) President and Chief Executive Officer Mohd Emir Mavani Abdullah today defended the purchase price of Pontian United Plantations Bhd, saying the deal was value for money based on its future prospects and it being a debt-free company.
He was responding to analysts' reports which said that the price tag of RM1.2 billion, or RM139.20 per share, was unreasonable and expensive compared with the current market price of RM89 per share.
"Pontian owns one mill with the capacity of about 90 metric tonnes per hour, while its operations in Sabah are expected to produce about 80,000 to 85,000 metric tonnes of crude palm oil and 17,000 metric tonnes of palm kernel per annum.
"The company also comes with RM250 million cash in hand. So if you calculate all these things together, you will see that it is actually a very good deal," he told a media briefing here Thursday.
Meanwhile, FGV Chairman Tan Sri Isa Samad said the Pontian acquisition would further increase FGV's landbank by about four per cent, thus maintaining Felda Group's position as the largest oil palm plantation operator worldwide.
"In addition to the increase in landbank, we are also concurrently deriving synergies and cost savings.
"We are confident that our strategic business decisions will have a positive effect on FGV shareholders and all stakeholders including Felda settlers," he added.
Meanwhile, in a statement, Mohd Emir said FGV would maintain and abide by its dividend policy of a minimum payout ratio of 50 per cent of its net profit.
For the FY2012, FGV paid a total dividend of 14 sen per share.
The dividend payout represented 64 per cent of net profit, higher than the 50 per cent payout as promised in the prospectus during FGV's initial public offering exercise in 2012.
"We are committed to ensuring that there is shareholder value as reflected by the substantial dividend policy payout ratio of 50 per cent," he said.
He was responding to analysts' reports which said that the price tag of RM1.2 billion, or RM139.20 per share, was unreasonable and expensive compared with the current market price of RM89 per share.
"Pontian owns one mill with the capacity of about 90 metric tonnes per hour, while its operations in Sabah are expected to produce about 80,000 to 85,000 metric tonnes of crude palm oil and 17,000 metric tonnes of palm kernel per annum.
"The company also comes with RM250 million cash in hand. So if you calculate all these things together, you will see that it is actually a very good deal," he told a media briefing here Thursday.
Meanwhile, FGV Chairman Tan Sri Isa Samad said the Pontian acquisition would further increase FGV's landbank by about four per cent, thus maintaining Felda Group's position as the largest oil palm plantation operator worldwide.
"In addition to the increase in landbank, we are also concurrently deriving synergies and cost savings.
"We are confident that our strategic business decisions will have a positive effect on FGV shareholders and all stakeholders including Felda settlers," he added.
Meanwhile, in a statement, Mohd Emir said FGV would maintain and abide by its dividend policy of a minimum payout ratio of 50 per cent of its net profit.
For the FY2012, FGV paid a total dividend of 14 sen per share.
The dividend payout represented 64 per cent of net profit, higher than the 50 per cent payout as promised in the prospectus during FGV's initial public offering exercise in 2012.
"We are committed to ensuring that there is shareholder value as reflected by the substantial dividend policy payout ratio of 50 per cent," he said.