KUALA LUMPUR (May 13): FGV Holdings Bhd has terminated its memorandum of understanding (MoU) with Hong Kong-listed China Machinery Engineering Corp (CMEC) to look into establishing paper pulp production facilities.

"The termination of the MoU would not have any financial impact on FGV and its subsidiaries," FGV said in a stock exchange filing today.

However, no reason was given for the termination.

On Dec 18, 2018, the Malaysian plantation group signed the MoU with CMEC to explore the feasibility of a joint venture for the establishment of paper pulp production facilities.

FGV interim group president and chief executive officer Datuk Wira Azhar Abdul Hamid had said then that FGV hoped to explore the opportunity to integrate operations of its existing mills with CMEC's engineering expertise, to establish the paper pulp production facilities with an initial capacity of 50,000 metric tonne per annum for the first phase.

CMEC is involved in engineering consulting and collaborates with research institutes in Hangzhou and Guangxi to convert empty fruit bunches into commercial paper pulp.

At the noon break today, FGV's share price was down 4 sen or 3.17% to RM1.22, giving the group a market value of RM4.45 billion.