MARKET DEVELOPMENT
PPB Oil Palms merger with Wilmar approved
PPB Oil Palms merger with Wilmar approved
13/4/07 (The Star) - KUALA LUMPUR: PPB Group Bhd shareholders yesterday approved the merger between Singapore-based Wilmar International Ltd and PPB subsidiary PPB Oil Palms Bhd (PPBOP) as well as the group’s edible oils, specialty fats, oleochemicals and trading businesses under PGEO Group Sdn Bhd and Kuok Oils & Grains Pte Ltd (KOG).
Executive chairman Datuk Oh Siew Nam told a media briefing after the 2½-hour EGM that the merger exercise and the de-listing of PPBOP from Bursa Malaysia were slated for completion by second quarter this year.
“PPB will be the second largest shareholder in Wilmar with 18.2% stake and able to equity account the earnings of one of Asia’s largest integrated agribusiness groups.
“We view the merger as a long term core investment for PPB Group. In exchange for the Wilmar shares, we hope to see good returns in terms of dividend,” he said.
“We believe the synergy from the Wilmar-PPBOP merger will be greater and its dividend stream will be able to cover our existing core flour, sugar, cinemas and waste water-treatment businesses.”
Oh was positive that PPB Group would continue to pay good dividends to its shareholders as “Wilmar is poised to perform better in future given its stature as a global plantation company with strong upstream and downstream operations.”
Bank Negara on Wednesday waived its earlier decision, which required Malaysian shareholders of PPB to repatriate all dividends, profits and proceeds pursuant to Wilmar’s voluntary offer in PPBOP.
Oh said: “This is a good move and will not be a hassle to our minority shareholders. They can even keep their investments there (in Singapore).”
He added that the PPB board of directors took time to explain all the pertinent aspects of the merger to the minority shareholders.
He said PPB Group would possibly seek “two seats” board representation in the enlarged Wilmar group.
On the series of events prior to completion of the merger, AmInvestment Bank Bhd director Foong Yein Fun, said: “There will be a sale and purchase agreement signing for the disposal of PGEO and KOG targeted middle of this month, the voluntary general offer (GO) of Wilmar on PGEO and KOG shares slated for April 26 and the first closing for the GO by end of this month.”
She expects Wilmar shares to be credited to the vendors of PGEO, KOG as well as PPBOP shareholders by the second half of May.
Meanwhile, Oh said: “Only firms with economies of scale can survive in the era of globalisation. With the integration of plantations and production plants, the costs will be lower, especially with the savings on freight and shipping expenses.”
The enlarged merger entity will see Wilmar as one of the world’s largest oil palm groups with a combined land bank of 573,401ha and also, one of Asia’s leading agribusiness and palm-based biodiesel group.
Wilmar will also operate four biodiesel plants, of which two are under construction with a combined capacity of 1.15 million tonnes per annum from the merger.
On the home front, Oh said PPB Group’s capital expenditure this year would be around RM910mil mainly for its flour, sugar and cinema operations.
Executive chairman Datuk Oh Siew Nam told a media briefing after the 2½-hour EGM that the merger exercise and the de-listing of PPBOP from Bursa Malaysia were slated for completion by second quarter this year.
“PPB will be the second largest shareholder in Wilmar with 18.2% stake and able to equity account the earnings of one of Asia’s largest integrated agribusiness groups.
“We view the merger as a long term core investment for PPB Group. In exchange for the Wilmar shares, we hope to see good returns in terms of dividend,” he said.
“We believe the synergy from the Wilmar-PPBOP merger will be greater and its dividend stream will be able to cover our existing core flour, sugar, cinemas and waste water-treatment businesses.”
Oh was positive that PPB Group would continue to pay good dividends to its shareholders as “Wilmar is poised to perform better in future given its stature as a global plantation company with strong upstream and downstream operations.”
Bank Negara on Wednesday waived its earlier decision, which required Malaysian shareholders of PPB to repatriate all dividends, profits and proceeds pursuant to Wilmar’s voluntary offer in PPBOP.
Oh said: “This is a good move and will not be a hassle to our minority shareholders. They can even keep their investments there (in Singapore).”
He added that the PPB board of directors took time to explain all the pertinent aspects of the merger to the minority shareholders.
He said PPB Group would possibly seek “two seats” board representation in the enlarged Wilmar group.
On the series of events prior to completion of the merger, AmInvestment Bank Bhd director Foong Yein Fun, said: “There will be a sale and purchase agreement signing for the disposal of PGEO and KOG targeted middle of this month, the voluntary general offer (GO) of Wilmar on PGEO and KOG shares slated for April 26 and the first closing for the GO by end of this month.”
She expects Wilmar shares to be credited to the vendors of PGEO, KOG as well as PPBOP shareholders by the second half of May.
Meanwhile, Oh said: “Only firms with economies of scale can survive in the era of globalisation. With the integration of plantations and production plants, the costs will be lower, especially with the savings on freight and shipping expenses.”
The enlarged merger entity will see Wilmar as one of the world’s largest oil palm groups with a combined land bank of 573,401ha and also, one of Asia’s leading agribusiness and palm-based biodiesel group.
Wilmar will also operate four biodiesel plants, of which two are under construction with a combined capacity of 1.15 million tonnes per annum from the merger.
On the home front, Oh said PPB Group’s capital expenditure this year would be around RM910mil mainly for its flour, sugar and cinema operations.