Asia Media's unit enters JV to develop Sarawak oil palm plantation

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KUALA LUMPUR (Apr 10): Digital out-of-home transit TV company Asia Media Group Bhd has tied up with a Sarawak-based company to develop a piece land that measures approximately 4,361ha at Loba Bunut Hulu, Bintangor, Sarawak, into an oil palm plantation.

In its filing to Bursa Malaysia today, Asia Media said its wholly-owned subsidiary DPO Plantations Sdn Bhd entered into a memorandum of agreement (MoA) with Batu Emas Resources Sdn Bhd to effect the joint-venture (JV) today, through a JV-company that will be formed.

Under the agreement, DPO will pay Batu Emas RM1.25 million through two tranches, for the land. The land consists of 2,661ha of native customary rights land (NCR), 1,000ha of adjacent NCR land, and 700ha of adjacent state land.

Batu Emas meanwhile, will hold the land in trust for the JV company.

DPO shall also pay the residents of Kampung Teluk Batu, Kampung Selamas, SG Kajeje, Kampung SG Tamawai and Kampung SG Sian — the NCR owners — RM480 per ha of the NCR land, via the Sarawak Land Custody Development Authority (PELITA).

But in the event Batu Emas fails to procure the 1,000 ha adjacent NCR land and to alienate the adjacent state land of 700ha for 60 years, to form part and parcel of the oil palm plantation development land on or before the second tranche payment, then RM250,000 will be deducted from the final payment.

The JV-company will be 60%-owned by DPO, 30% by Batu Emas which trades and deals in agricultural and natural products, while the remainder 10% will be held by PELITA.  

The MoA is subject to, among others, the receipt of an approval by the Ministry of Land Development Sarawak for DPO to partner Batu Emas, to develop the NCR land into an oil palm plantation.

Once approval has been obtained, Batu Emas and DPO will enter into a sublease agreement over the land for an initial period of at least 60 years from the date of the JVA, with an option to renew for another 60 years.

In the event any of the conditions precedent are not fulfilled, Batu Emas shall return all monies to DPO, Asia Media Group said.

“The consideration to be paid by DPO to Batu Emas and the NCR owner will be funded via internally-generated funds, bank borrowings and/or additional funds to be raised from the capital market,” the company said.

Asia Media, which offers infotainment and targeted advertising through the use of digital electronic displays, closed unchanged at 6 sen today, giving it a market capitalisation of RM71.84 million.

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