This article first appeared in The Edge Financial Daily on July 19, 2018

KUALA LUMPUR: A wholly-owned subsidiary of Boustead Plantations Bhd has agreed to acquire plantation assets and land measuring 12,144.99 acres (4,915ha) in Sabah for an indicative purchase consideration of RM397 million, about 8.31% less than originally proposed.

Boustead Rimba Nilai Sdn Bhd, via a letter dated July 17, 2018 to the vendor Sit Seng & Sons Realty Sdn Bhd, has agreed to the purchase of the plantation land comprising 17 titles held by the vendor and its subsidiaries at the varied price, which includes all movable fixed assets, machinery and vehicles, plus a 75-tonne per hour palm oil mill.

In a bourse filing yesterday, Boustead Plantations pointed out the new deal varies its May 8 intention to acquire the plantation assets, comprising plantation land measuring 5,531.25ha and a 60-tonne per hour palm oil mill, for RM433 million.

The proposal is subject to terms and conditions to be mutually agreed by the parties and the signing of a sale and purchase agreement (SPA) is to be executed within 30 days from July 17, 2018. “The said letter is not intended to be legally binding until and unless the SPA is entered into by all relevant parties,” said Boustead Plantations.

Boustead Plantations shares closed yesterday at RM1.27 with a market capitalisation of about RM2.8 billion.