MARKET DEVELOPMENT
Moody’s: Sime Unlikely to Attain Full Ownership in NBPOL
Moody’s: Sime Unlikely to Attain Full Ownership in NBPOL
14/10/2014 (The Star) - Moody’s Investors Service believes that Sime Darby Bhd is unlikely to attain full ownership in New Britain Palm Oil Ltd (NBPOL) as government-related entities currently hold around 22% in the latter and may wish to increase their ownership interest.
“Moody’s concludes that NBPOL is therefore likely to remain listed, but not in London, allowing the company to raise funds for expansion or make selective share placements to dilute Sime Darby’s stake if required,” it said in a statement.
Last week, Sime Darby announced an offer for all of NBPOL’s shares, valuing the equity at RM5.62bil. Including assumed debt of RM850mil in NBPOL’s balance sheet, the cost would total RM6.47bil.
In the same statement, Moody’s vice-president and senior credit officer Alan Greene noted that the proposed acquisition would increase Sime Darby’s planted area by 15%.
“By comparison, the next largest players are Felda Global Ventures and Golden Agri-Resources,” he said.
The rating agency pointed out that Sime Darby’s 525,290 ha of oil palm as at June 2014, combined with NBPOL’s 79,884 ha of oil palm in the same period, would amount to 1.62 times that of Felda Global Ventures and 1.29 times that of Golden Agri-Resources Ltd.
“The acquisition would also improve the geographical diversity of Sime Darby’s palm oil sources, thereby mitigating the risk of unfavourable localised weather,” said Greene.
Sime Darby’s existing plantations span Malaysia, Indonesia and Liberia. The addition of NBPOL’s plantations in Papua New Guinea will result in a planted area profile that is well-balanced between Malaysia and overseas.
“Moody’s concludes that NBPOL is therefore likely to remain listed, but not in London, allowing the company to raise funds for expansion or make selective share placements to dilute Sime Darby’s stake if required,” it said in a statement.
Last week, Sime Darby announced an offer for all of NBPOL’s shares, valuing the equity at RM5.62bil. Including assumed debt of RM850mil in NBPOL’s balance sheet, the cost would total RM6.47bil.
In the same statement, Moody’s vice-president and senior credit officer Alan Greene noted that the proposed acquisition would increase Sime Darby’s planted area by 15%.
“By comparison, the next largest players are Felda Global Ventures and Golden Agri-Resources,” he said.
The rating agency pointed out that Sime Darby’s 525,290 ha of oil palm as at June 2014, combined with NBPOL’s 79,884 ha of oil palm in the same period, would amount to 1.62 times that of Felda Global Ventures and 1.29 times that of Golden Agri-Resources Ltd.
“The acquisition would also improve the geographical diversity of Sime Darby’s palm oil sources, thereby mitigating the risk of unfavourable localised weather,” said Greene.
Sime Darby’s existing plantations span Malaysia, Indonesia and Liberia. The addition of NBPOL’s plantations in Papua New Guinea will result in a planted area profile that is well-balanced between Malaysia and overseas.