KUALA LUMPUR (Apr 27): Sarawak Oil Palms Bhd (SOPB) will get a RM6.5 million deposit back after its proposed acquisition to buy a 60% stake in DD Pelita Sebungan Plantation Sdn Bhd and Mutiara Pelita Genaan Plantation Sdn Bhd from Double Dynasty Sdn Bhd (DDSB) and Mutiara Hartabumi Sdn Bhd (MHSB) for RM134.9 million was aborted.

This follows DDSB and MHSB failure to obtain the consent from the Ministry of Land Development on Dec 16, 2014 for the sale and transfer of their sale shares, which is one of the conditions precedent in the share sale agreement (SSA).

In a filing with Bursa Malaysia today, SOPB (fundamental: 1; valuation: 1.4) said the vendors will also pay the land deposits amounting to RM450,000 to the company.

SOPB had proposed the related party deal in March 2014.  

Under the conditional share-sale agreement, the acquisition was to be satisfied via 9.2 million shares of RM1 each in SOPB and RM66.82 million in cash.

There was also an arrangement to contract the vendors (DDSB and MHSB) for their services to procure up to 8,000ha of Native Customary Rights (NCR) land within the Sarawak state government’s scheme for the development of the land into oil palm plantations for RM3,500 per ha.

This land procurement was to be satisfied by the issuance of 473 SPOB shares at an issue price of RM7.40 per additional consideration share. 

SOPB shares closed 5 sen or 1% lower at RM4.95 today, with a market capitalisation of RM2.198 billion.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)