3/8/05 KUALA LUMPUR, (Asia Pulse) - IOI Corporation Bhd plans toconsolidate and streamline its palm oil business by privatising IOIOleochemical Industries Bhd (IOI Oleo)

In a statement on Tuesday, IOI Corp said the proposed privatisation willbe implemented by way of an IOI Oleo members' scheme of arrangement underSection 176 of the Companies Act, 1965 between IOI Corp, IOI Oleo and theminority shareholders of IOI Oleo.

The proposed privatisation involves the cancellation of the remaining78,709,758 shares in IOI Oleo it does not hold. This includes the11,369,000 shares held by IOI Properties Bhd (IOI Prop) .

Up to 58,000 new IOI Oleo shares in its employee share option scheme(Esos) will also be cancelled.

Both cancellations will be done at RM11.08 (US$2.95) for each IOI Oleoshare.

IOI Oleo shareholders, except IOI Corp, have two options: accept a cashsum of RM11.08 paid by IOI Corp for each IOI Oleo share or to accept onenew ordinary share of 50 sen each in IOI Corp at an issue price of RM10.82per IOI Corp share credited as fully paid-up and RM11.34 cash for everytwo IOI Oleo shares.

At the date of the announcement on Tuesday, IOI Corp and IOI Prop held123,268,183 and 11,369,000 shares in IOI Oleo, representing 61.03 per centand 5.63 per cent respectively of IOI Oleo's issued and paid-up sharecapital of 201,977,941 shares.

IOI Corp said it will use its own funds to finance the privatisationexercise, which is estimated to cost RM872.75 million.

Upon completion of the proposed privatisation, IOI Oleo will become awholly-owned subsidiary of IOI Corp.

IOI Oleo will be delisted from the main board of Bursa Malaysia Bhd.

Apart from streamlining the group's plantation business, the exercise willbolster contributions from downstream activities, IOI Corp said.

It will also help hedge the group against volatility in crude palm oil(CPO) prices while the enlarged asset base and share capital of IOI Corpwill also strengthen its financial position.

ASIA PULSE