Rimbunan Sawit sells Sarawak plantation land to WTK for RM85mil cash

Rimbunan Sawit sells Sarawak plantation land to WTK for RM85mil cash
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KUALA LUMPUR (Jan 22): Rimbunan Sawit Bhd is selling plantation land measuring 4,698.2 hectares to WTK Holdings Bhd for RM85 million cash.

In bourse filings by both companies today, they said Rimbunan Sawit’s wholly-owned subsidiary Lumiera Enterprise Sdn Bhd signed a sale and purchase agreement with WTK’s unit Biogreen Success Sdn Bhd to dispose of its land situated in Baram, Sarawak together with the oil palm plantation, its facilities. infrastructure, improvements and immovable assets.

Rimbunan Sawit is expecting to make a gain of RM900,000 from the disposal.

“The cash proceeds from the proposed disposal is to bring down short-term bank borrowings and to strengthen the group’s cash flow position. It is part of the group’s rationalization plan to further streamline and to better manage its portfolio of oil palm estates,” Rimbunan Sawit said.

Meanwhile, WTK said the proposed acquisition is part of its strategy to acquire more plantation lands in Malaysia in view of scarcity of suitable and sizeable land banks for oil palm cultivation.

Upon completion of the proposed acquisition, the oil palm planted area held by WTK Group will increase by 39% from 8,662 hectares to 12,052 hectares.

Barring any unforeseen circumstances, the proposed disposal is expected to be completed in the third quarter of 2020.

Rimbunan Sawit closed one sen or 2.82% lower at 35 sen while WTK Holding ended one sen or 0.95% down at 52 sen.