MARKET DEVELOPMENT
FGV’s China Deal Still Pending Approval -- Almost A Year Later
FGV’s China Deal Still Pending Approval -- Almost A Year Later
15/03/2016 (The Star) - Felda Global Ventures Holdings Bhd (FGV), which is seeking to buy about 55% equity interest in China-based edible oil producer Zhong Ling Nutril-Oil Holdings Ltd, has cancelled its application for approval to one of the regulators and has not resubmitted it.
Announcing this to Bursa Malaysia on Monday, the agri-business giant said the cancellation was pending more information to be given by FGV on its investment.
FGV did not name the regulator, but the two proposed share purchase agreements - SPA 1 and SPA 2 - signed with various vendors of Zhong Ling Nutril-Oil shares require the approvals of Bank Negara and the Finance Ministry (MOF) as well as FGV shareholders.
“To date, no subsequent application has been submitted to the said regulator,” it said.
It explained that when it signed the agreements with the share vendors, the parties agreed that the conditions precedent were to be fulfilled within five business days.
Nevertheless, FGV said, the parties were mindful of the due processes involving the regulators and hence had provided a clause in the two sale and purchase agreements - SPA 1 and SPA 2 - in which they might mutually extend the time to fulfill the conditions precedent in relation to the proposed acquisition.
“Under no circumstances whatsoever does the board of directors of FGV imposes an express or implied obligation on the regulators to process and approve any approvals in connection with the proposed acquisition within any time period agreed by the parties in SPA 1 and SPA 2,” it added.
To recap, FGV’s unit Felda Global Ventures Downstream Sdn Bhd (FGVD) inked two conditional SPAs to buy about 55% of Zhong Ling Nutril-Oil for a total of RM976.25mil on Feb 26. The proposed deal was expected to expand FGV’s oils and fats capabilities in China.
On March 4, FGVD and the vendors mutually agreed to extend the period to satisfy the conditions precedent of SPA 1 and SPA 2 from March 4 to March 18 (this Friday), or any other date as may be mutually agreed on by the parties.
FGV did not then mention any reason for the extension. In a reply to Bursa Malaysia’s queries a day earlier, the company had said it expected to receive the MOF and Bank Negara approvals within five business days from the SPAs.
“The application to Bank Negara and MOF to seek their approvals commenced concurrently in April 2015,” it said.
In a separate announcement to Bursa Malaysia on Monday, FGV said its board would deliberate on the appointment/change of FGV chief executive officer and make the requisite announcement immediately on the receipt of the nomination letter from the relevant authority.
StarBiz had reported last Friday that the company was set to announce the departure of chief executive officer Datuk Mohd Emir Mavani Abdullah after a three-year stint at the palm oil firm.
Announcing this to Bursa Malaysia on Monday, the agri-business giant said the cancellation was pending more information to be given by FGV on its investment.
FGV did not name the regulator, but the two proposed share purchase agreements - SPA 1 and SPA 2 - signed with various vendors of Zhong Ling Nutril-Oil shares require the approvals of Bank Negara and the Finance Ministry (MOF) as well as FGV shareholders.
“To date, no subsequent application has been submitted to the said regulator,” it said.
It explained that when it signed the agreements with the share vendors, the parties agreed that the conditions precedent were to be fulfilled within five business days.
Nevertheless, FGV said, the parties were mindful of the due processes involving the regulators and hence had provided a clause in the two sale and purchase agreements - SPA 1 and SPA 2 - in which they might mutually extend the time to fulfill the conditions precedent in relation to the proposed acquisition.
“Under no circumstances whatsoever does the board of directors of FGV imposes an express or implied obligation on the regulators to process and approve any approvals in connection with the proposed acquisition within any time period agreed by the parties in SPA 1 and SPA 2,” it added.
To recap, FGV’s unit Felda Global Ventures Downstream Sdn Bhd (FGVD) inked two conditional SPAs to buy about 55% of Zhong Ling Nutril-Oil for a total of RM976.25mil on Feb 26. The proposed deal was expected to expand FGV’s oils and fats capabilities in China.
On March 4, FGVD and the vendors mutually agreed to extend the period to satisfy the conditions precedent of SPA 1 and SPA 2 from March 4 to March 18 (this Friday), or any other date as may be mutually agreed on by the parties.
FGV did not then mention any reason for the extension. In a reply to Bursa Malaysia’s queries a day earlier, the company had said it expected to receive the MOF and Bank Negara approvals within five business days from the SPAs.
“The application to Bank Negara and MOF to seek their approvals commenced concurrently in April 2015,” it said.
In a separate announcement to Bursa Malaysia on Monday, FGV said its board would deliberate on the appointment/change of FGV chief executive officer and make the requisite announcement immediately on the receipt of the nomination letter from the relevant authority.
StarBiz had reported last Friday that the company was set to announce the departure of chief executive officer Datuk Mohd Emir Mavani Abdullah after a three-year stint at the palm oil firm.