Friday 29 Mar 2024
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KUALA LUMPUR: Sarawak Oil Palms Bhd has withdrawn its bid to acquire a 60% stake in DD Pelita Sebungan Plantation Sdn Bhd and Mutiara Pelita Genaan Plantation Sdn Bhd from Double Dynasty Sdn Bhd (DDSB) and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) respectively for RM134.9 million, after the vendors failed to get the authorities’ nod for the sale and transfer of their sale shares.

DD Pelita and Mutiara Pelita have collectively planted 9,661ha of oil palm estates in Sarawak with an estimated average age profile of 5½ years.

The proposed acquisition was expected to boost Sarawak Oil Palms’ total planted area by 15% to 73,191ha from 63,530ha as at Dec 31, 2013.

In a filing with Bursa Malaysia yesterday, Sarawak Oil Palms said it was informed by the vendors (DDSB and MHSB) that the latter were unable to obtain the consent from the Ministry of Land Development, Sarawak, for the sale and transfer of their sale shares, which was one of the conditions precedent in the share sale agreement (SSA).

“[As such,] the vendors are giving notice to rescind the SSA pursuant to clause 4.5.1 of the SSA. As the sale and purchase agreement (SPA) is conditional upon the completion of the SSA, the SPA would also be rescinded,” it said.

Sarawak Oil Palms noted that it is currently contemplating its next course of action, which would include the recovery of the deposit and the cessation of its representative as a director in DD Pelita and Mutiara Pelita.

When contacted, a Sarawak Oil Palms spokesman told The Edge Financial Daily that the aborted deal would have no immediate impact on the group’s earnings.

“There will be no immediate impact on us. We will continue to expand our plantation acreage if the opportunity arises. We will have to work harder to meet our objective,” he said over the phone yesterday.

He added that the group is still looking to procure new plantation land for expansion, but there is “nothing concrete so far”.

Under the conditional SSA, there was also an arrangement to contract DDSB and MHSB for their services to procure the natives with up to 8,000ha of native customary rights (NCR) land to come within the Sarawak government’s scheme for the development of this land into oil palm plantations, at RM3,500 per ha.

This procurement will be satisfied by the issuance of 473 Sarawak Oil Palms shares at an issue price of RM7.40 per additional consideration share.

Once the 8,000ha of NCR land have been procured by DDSB and MHSB, a total of 3.78 million additional shares will be issued by Sarawak Oil Palms to the vendors as settlement for the rights procurement consideration.

There was also a conditional SPA with landowners DD Palm Oil Mills Sdn Bhd, Ting Chek Ing, Lee Ka Ming and Lee King Ho for the proposed acquisition of 34.9ha of land in Bintulu, Sarawak, for RM4.3 million cash.

Shares of Sarawak Oil Palms closed up 2.08% or 11 sen at RM5.39 yesterday, giving it a market capitalisation of RM2.37 billion.

 

This article first appeared in The Edge Financial Daily, on December 18, 2014.

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