KUALA LUMPUR (Jan 2): XingHe Holdings Bhd is proposing to acquire a prawn farm in Tawau, Sabah, along with related facilities and assets for RM100 million.

In a filing to Bursa Malaysia today, XingHe said its wholly-owned subsidiary XW Aquaculture Sdn Bhd had on Dec 31, 2018 entered into a sale and purchase agreement and an assets sale and purchase agreement with Pegagau Aquaculture Sdn Bhd for the transaction.

This will involve XingHe acquiring a piece of land measuring 97.9 hectares, with a 99-year lease period from Jan 1, 1990 to Dec 31, 2088, at a price of RM12.5 million, and all ponds, other land improvements, buildings, plant and machinery, equipment, motor vehicles, livestock and consumables for RM87.5 million.

On the rationale of its acquisition, XingHe said the Malaysian prawn farm business would supplement its existing edible oil operations in China, which is currently facing production curbs due to China's campaign against environmental pollution in the smog-prone region of northern China, where the group's production plant is located (Neihuang County, Henan Province).

At 2.33pm, XingHe shares were unchanged at 3.5 sen, with 675,000 shares traded.