Thursday 28 Mar 2024
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KUALA LUMPUR: Kuala Lumpur Kepong Bhd (KLK) is disposing of a 20% equity interest in its wholly-owned subsidiary, KLK Premier Capital Ltd, for US$44 million or RM154 million cash.

In a filing with Bursa Malaysia, KLK said it, together with KLK Premier Capital, signed a share purchase agreement yesterday to dispose of the former’s 20% equity interest to its long-time Japanese partner, Mitsui and Co Ltd.

“Mitsui shall acquire from KLK 2.36 million ordinary shares and 84,500 redeemable preference shares in KLK Premier Capital,” said the plantation giant, adding that its cost of investment in the unit was US$54.06 million since Sept 12, 2013.

“As Mitsui is KLK’s long-term business partner, the proposed disposal will allow KLK to leverage on Mitsui’s business/marketing relationships in the PRC (People’s Republic of China) and technological expertise in oleochemical downstream manufacturing activities,” said KLK.

KLK Premier Capital owns 100% equity interest in Taiko Palm-Oleo (Zhangjiagang) Co Ltd (TPOZ), The proposed disposal is conditional, among others, upon the injection of US$50.3 million by KLK/KLK Premier Capital into TPOZ, to fund the latter’s expansion of its plant capacity and product range.

The deal is expected to be completed in the first quarter of this year, or on any other date mutually agreed upon.

It is expected to result in a gain before tax to KLK of approximately US$33.3 million. 

 

This article first appeared in The Edge Financial Daily, on January 9, 2015.

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