MARKET DEVELOPMENT
Sarawak Firm Eyes Buying 60% in DD Pelita Plantation and Mutiara Pelita
Sarawak Firm Eyes Buying 60% in DD Pelita Plantation and Mutiara Pelita
20/03/2014 (The Star) - Sarawak Oil Palms Bhd has proposed to acquire a 60% stake in DD Pelita Sebungan Plantation Sdn Bhd and Mutiara Pelita Genaan Plantation Sdn Bhd from Double Dynasty Sdn Bhd (DDSB) and Mutiara Hartabumi Sdn Bhd (MHSB) for RM134.9mil.
The acquisition is to be satisfied via 9.2 million ordinary shares of RM1 each in Sarawak Oil Palms and RM66.82mil in cash.
Under a conditional share-sale agreement, there is an arrangement to contract the vendors (DDSB and MHSB) for their services to procure the natives with up to 8,000ha of Native Customary Rights (NCR) land to come within the Sarawak government’s scheme for the development of this land into oil palm plantations for procurement of RM3,500 per ha.
This procurement will be satisfied by the issuance of 473 Sarawak Oil Palms shares at an issue price of RM7.40 per additional consideration share.
“Once the 8,000ha of NCR land have been procured by the vendors, a total of 3.78 million additional shares will be issued by Sarawak Oil Palms to the vendors as settlement for the rights procurement consideration,” Sarawak Oil Palms told Bursa Malaysia.
There is also a conditional sale and purchase agreement with landowners DD Palm Oil Mills Sdn Bhd (DDPOM), Ting Chek Ing, Lee Ka Ming and Lee King Ho for the proposed acquisition of 34.9ha of land in Bintulu, Sarawak, for RM4.3mil to be settled in cash.
This proposed acquisition involves the acquisition of 10 pieces of properties.
DDPOM has also entered into contracts in relation to the construction of a palm oil mill on the land that it is selling to Sarawak Oil Palms.
In terms of valuation, the RM134.9mil computation for the adjusted net tangible asset of DD Pelita and Mutiara Pelita was derived based on their unaudited financial year ended Dec 31, 2013 and after taking into account the surplus arising from the revaluation of the underlying plantation estates.
“The proposed acquisition is consistent with Sarawak Oil Palms’ plans to continue to expand its oil palm cultivation business by acquiring new land bank in Sarawak,” said Sarawak Oil Palms.
“As the oil palm plantations held under DD Pelita and Mutiara Pelita consist mostly of oil palm trees in its prime (9-10 years) and young oil palm trees (4-8 years) making up approximately 2% and 84.4% of total planted acreage of 9,661ha as at Dec 31, 2013, this is envisaged to contribute positively to Sarawak Oil Palms’ fresh fruit bunches (FFB) production,” said Sarawak Oil Palms.
It said the acquisition of properties was expected to increase Sarawak Oil Palms’ milling capacity from six to seven, and the group’s palm oil processing capacity from 465 tonnes/hr to 525 tonnes/hr.
“The mill to be constructed on the properties is strategically located to receive the FFB output from the oil palm plantations of DD Pelita and Mutiara Pelita, as well as FFB output from nearby third-party oil palm plantations.
“The processing of FFB at the mill shall provide ‘down-stream’ processing facility for the group’s oil palm plantations and allow the group to capture a larger slice of the value-chain of FFB production,” it added.
The acquisition is to be satisfied via 9.2 million ordinary shares of RM1 each in Sarawak Oil Palms and RM66.82mil in cash.
Under a conditional share-sale agreement, there is an arrangement to contract the vendors (DDSB and MHSB) for their services to procure the natives with up to 8,000ha of Native Customary Rights (NCR) land to come within the Sarawak government’s scheme for the development of this land into oil palm plantations for procurement of RM3,500 per ha.
This procurement will be satisfied by the issuance of 473 Sarawak Oil Palms shares at an issue price of RM7.40 per additional consideration share.
“Once the 8,000ha of NCR land have been procured by the vendors, a total of 3.78 million additional shares will be issued by Sarawak Oil Palms to the vendors as settlement for the rights procurement consideration,” Sarawak Oil Palms told Bursa Malaysia.
There is also a conditional sale and purchase agreement with landowners DD Palm Oil Mills Sdn Bhd (DDPOM), Ting Chek Ing, Lee Ka Ming and Lee King Ho for the proposed acquisition of 34.9ha of land in Bintulu, Sarawak, for RM4.3mil to be settled in cash.
This proposed acquisition involves the acquisition of 10 pieces of properties.
DDPOM has also entered into contracts in relation to the construction of a palm oil mill on the land that it is selling to Sarawak Oil Palms.
In terms of valuation, the RM134.9mil computation for the adjusted net tangible asset of DD Pelita and Mutiara Pelita was derived based on their unaudited financial year ended Dec 31, 2013 and after taking into account the surplus arising from the revaluation of the underlying plantation estates.
“The proposed acquisition is consistent with Sarawak Oil Palms’ plans to continue to expand its oil palm cultivation business by acquiring new land bank in Sarawak,” said Sarawak Oil Palms.
“As the oil palm plantations held under DD Pelita and Mutiara Pelita consist mostly of oil palm trees in its prime (9-10 years) and young oil palm trees (4-8 years) making up approximately 2% and 84.4% of total planted acreage of 9,661ha as at Dec 31, 2013, this is envisaged to contribute positively to Sarawak Oil Palms’ fresh fruit bunches (FFB) production,” said Sarawak Oil Palms.
It said the acquisition of properties was expected to increase Sarawak Oil Palms’ milling capacity from six to seven, and the group’s palm oil processing capacity from 465 tonnes/hr to 525 tonnes/hr.
“The mill to be constructed on the properties is strategically located to receive the FFB output from the oil palm plantations of DD Pelita and Mutiara Pelita, as well as FFB output from nearby third-party oil palm plantations.
“The processing of FFB at the mill shall provide ‘down-stream’ processing facility for the group’s oil palm plantations and allow the group to capture a larger slice of the value-chain of FFB production,” it added.