Kulim to be delisted by Q3

QSR Brands (M) Holdings Sdn Bhd chairman Datuk Kamaruzzaman Abu Kassim giving his speech during the closing ceremony of the WHR campaign.

KUALA LUMPUR: Kulim (M) Bhd expects its delisting from the main market of Bursa Malaysia to be completed by the third quarter of this year.

The oil palm plantation company said 99.59% of its shareholders had voted in favour of Johor Corp’s proposed selective capital reduction and repayment exercise (SCR) to privatise the company.

“The offer of RM4.10 a share is a reasonable offer, providing Kulim’s shareholders the opportunity to realise their investment with a good return,” Kulim chairman Datuk Kamaruzzaman Abu Kassim said in a statement on Tuesday.

He pointed out that the privatisation scheme would give Kulim the flexibility to decide and act as the company recalibrates its business transformation.

“As a public listed entity, substantial capital required to grow both our existing and new businesses may potentially strain the cash flow position and could impair the group.

“The outlook for the Malaysian plantation sector remains challenging as profit margin had declined to 11% in 2015 from 29% in 2011 due to the fluctuations of global crude palm oil price,” he said.

Kulim’s share price has been trading between RM2.46 and RM3.49 in the past one year prior to the SCR offer.

The entitled shareholders will receive a total repayment amount of up to RM2.26bil.

Meanwhile, Kamaruzzaman said the divestment of New Britain Palm Oil Ltd (NBPOL) had left the group with a significantly smaller plantation landbank. 

NBPOL had contributed to about 60% to the group’s total revenue in the last two years, he said.

While the group had expanded into the Indonesian plantation sector, he said it would take a long time before this operation was able to contribute to the group’s revenue.

He said the initial phase would incur additional capital expenditure and operating expenses in developing the landbank.

“Moving forward, with a moderate economic growth rate as indicated by Bank Negara Malaysia, we are cognisant of the external factors that will continue to adversely impact our business performance, posing a challenge to the Group to maintain its growth momentum,” he said. - Bernama