KUALA LUMPUR (March 12): Ekovest Bhd has proposed to acquire a 23.42% stake in PLS Plantations Bhd that is held by Serumpun Abadi Sdn Bhd, a company owned by Ekovest executive chairman Tan Sri Lim Kang Hoo. 

The RM76.50 million purchase consideration will be funded via internal funds, Ekovest said in a filing with Bursa Malaysia.

The group said the acquisition will allow it to venture into the management and operation of forest plantation and oil palm plantation.

This is in line with the group’s long term strategy of expanding and diversifying into other businesses in order to reduce reliance on its existing businesses in construction, property development and toll operations, it added.

Barring any unforeseen circumstances, Ekovest said the acquisition is expected to be completed by the first quarter of 2019. 

“The board is of the view that the proposed acquisition is expected to contribute positively to the long term growth prospects of Ekovest group, as well as enable Ekovest group to recognise its proportionate share of PLS group’s future profit through the share of earnings in PLS Plantations,” Ekovest said. 

“Furthermore, in line with the company’s long term strategy of expanding and diversifying into other businesses, the company may consider acquiring more PLS Plantations’s shares at an opportune time,” the filing added. 

PLS Group, through its 70%-owned subsidiary Aramijaya Sdn Bhd, runs Ladang Hutan Ulu Sedili, a forest plantation project that covers a total area of 35,223 hectares within the Kota Tinggi and Mersing districts of Johor. 

For the past five years, PLS Group's revenue has been fluctuating. Meanwhile, it also has recorded losses for the past three financial years. 

The directors of PLS Plantation have been deliberating on a new strategic direction for the company, which includes diversifying into the durian plantation and distribution business in order to improve its financial performance, the group added. 

Shares of Ekovest rose 0.5 sen or 0.85% to close at 59 sen today, valuing the group at RM 1.26 billion. Meanwhile, PLS Plantations fell two sen or 2.06% to settle at 95 sen, giving it a market capitalisation of RM310.37 million.