27/10/2011 (The Star) -  IOI Corp Bhd has terminated its proposed acquisition of 11,977.91ha of oil palm plantation land in Sabah from Dutaland Bhd for RM830mil.

IOI Corp said on Tuesday that the cancellation was “due to non-compliance of certain terms and conditions”.

On July 28, IOI Corp's unit Sri Mayvin Plantation Sdn Bhd had signed a sale and purchase agreement (SPA) with Dutaland's unit Pertama Land & Development Sdn Bhd for the land.

It said then that the proposed acquisition would increase IOI group's plantation landbank by 11,977.91ha or 6.69% from its present 178,884ha to 190,862ha in Malaysia.

Loan secured: IOI Management Sdn Bhd is reported to have sealed a US$330mil five-year
club loan with Bank of Tokyo-Mitsubishi and Sumitomo Mitsui Banking Corp. — Reuters

Dutaland, in a separate filing with Bursa Malaysia, said the company was taking legal advice and had duly notified Sri Mayvin that it did not accept Sri Mayvin's reasons for the termination of the SPA.

Accordingly, the company has notified the stakeholder, OSK Trustees BHD not to remit to Sri Mayvin the deposit of RM83mil being the 10% deposit paid by Sri Mayvin under the SPA and any interest accrued.

Analysts were generally neutral on the acquisition as IOI Corp would need to rehabilitate the Sabah estates for the next three to four years before reaping good yields.

Meanwhile, Reuters reported, quoting sources, that IOI Management Sdn Bhd had sealed a US$330mil five-year club loan with Bank of Tokyo-Mitsubishi and Sumitomo Mitsui Banking Corp.

The loan was signed on Oct 18.