Boustead considering options for palm oil unit
08.07.2021 (www.thestar.com.my) - KUALA LUMPUR: Boustead Holdings Bhd
is weighing options for its listed palm oil subsidiary including a sale, according to sources.
The parent of Boustead Plantations Bhd is working with an adviser on the potential options, the sources said.
A plan could be implemented as soon as in the next few weeks, they said.
The holding company, which owns 57.4% of the subsidiary, could sell the unit or lease the plantations to third parties.
Another option is to sell the individual plantations separately.
Lembaga Tabung Angkatan Tentera (LTAT), the majority shareholder of Boustead Holdings, owns 12.1% of the plantations unit, according to data compiled by Bloomberg.Boustead Plantations has a market value of about RM1.3bil (US$322mil).
Deliberations are still ongoing and Boustead Holdings could decide not to proceed with a sale, the sources said.
Boustead Holdings does not have immediate plans to pare down its stake in Boustead Plantations, a spokesperson said in response to a Bloomberg News query.
Boustead Plantations is a core contributor to the group’s performance, however the company is continuously on the lookout to unlock value within the group, they said.The potential sale comes as Boustead Holdings is attempting to reinvent itself amid difficulties that predate the coronavirus pandemic, including debt totalling almost RM7.5bil, according to its earnings statement for the quarter ended March 31.
Its shares tumbled in February after LTAT announced it would not proceed with a take-private proposal for Boustead, citing economic challenges from the coronaviruspandemic.
The restructuring plan by one of Malaysia’s oldest conglomerates, which traces its roots to 1828, included a pledge to dispose of non-strategic assets.
Palm oil prices are up 3.7% this year after touching an all-time high in May.
Palm oil planter Kuala Lumpur Kepong Bhd last month offered to buy a controlling stake in smaller rival IJM Plantations Bhd for RM1.5bil.
Boustead Plantations owns and leases a total of 48 oil palm plantation estates and 10 palm oil mills in Malaysia, according to its website. — Bloomberg