KUALA LUMPUR: Kulim (Malaysia) Bhd said that as a business entity, the group receives proposals from third parties for numerous corporate and business arrangements.

In reply to a query from Bursa Malaysia, Kulim stated that in dealing with these proposals, the group works closely within the guidelines stipulated by the authorities, especially in making timely and appropriate announcements when any of the proposals received has been agreed upon or accepted.

“While evaluating proposals to enhance shareholders’ value, the announcement of any proposal would be subject to due diligence as well as the approval of the board of directors,” it said in response to a report in The Edge weekly last week that the company had received offers for its subsidiary New
Britain Palm Oil Ltd (NBPOL).

Apart from NBPOL, the other listed companies in the Kulim stable are QSR Brands Bhd, KFC Holdings (Malaysia) Bhd and Sindora Bhd.

NBPOL, which owns more than 80,000ha of oil palm estates in Papua New Guinea and the Solomon Islands, is listed on the London Stock Exchange and Port Moresby Stock Exchange.

The Edge Malaysia on Monday reported that the Petroleum Authority of Thailand is understood to have made an offer for Kulim’s 50.86% stake in NBPOL in its attempt to venture into alternative energy, including palm biodiesel.

AmResearch Sdn Bhd analyst Gan Huey Ling believed Kulim was unlikely to sell its stake in NBPOL as the company was the group’s “prized asset”. NBPOL was the driver of Kulim’s revenue and profit, accounting for 71% of the group’s plantation revenue and 86% of its operating income (earnings before interest and tax or Ebit) in the first half of its fiscal 2009, Gan said.

“We do not view the sale of NBPOL positively. Any partial sale would only dilute the group’s interest in Papua New Guinea and increase minority interest,” Gan wrote in a report on Monday.

AmResearch maintained its buy on Kulim with a fair value of RM8.85.

This article appeared in The Edge Financial Daily, September 9, 2009.