PETALING JAYA: Golden Land Bhd is acquiring controlling stakes in two plantation companies, with permits to develop a total of 26,600ha in Sulawesi in Indonesia for US$5.73mil cash (RM20.65mil).
In a filing with Bursa Malaysia, the company announced that it entered into two conditional sale and purchase agreements (CSPA) yesterday with vendor Hery Hermawan Herijanto to acquire 68.75% in Parimo Agri Holding Pte Ltd (PAH) and Parigi Plantation Holding Pte Ltd (PPH) for US$3.25mil and US$2.49mil respectively.
While PAH and PPH are incorporated in Singapore with S$10,000 in paid-up share capital comprising 10,000 shares each, both companies have subsidiaries registered in central Sulawesi, Indonesia.
PAH has an 80% stake in PT Ampibabo Agro Lestari, which has a location permit of 15,067ha, while PPH’s 80% subsidiary PT Agri Toribulu Asri has a location permit land of 11,533ha.
The acquisition provides Golden Land with the opportunity to acquire oil palm plantation overseas.
“The scarcity of arable land and acute shortage of labour are the main challenges for our group to expand our land bank locally,’’ it said.
Golden Land said RM20.65mil would be paid to Herijanto in two tranches.
The first tranche would be 20% of the total amount to PAH and PPH respectively upon completion of the acquisition.
The remaining payment would be made subsequent to the closing of the CSPA.
Golden Land said the acquisition would be financed by internally-generated funds and bank borrowings.
While the acquisition is not subject to the approval of shareholders, it is subject to approvals from relevant authorities in Indonesia.
The company expects the acquisition to be completed within five months from yesterday.
“The global dependence on palm oil is expected to continue to rise with the increasing demand for soya oil as a source of biodiesel,” it said in the filing with Bursa.
Golden Land said it did not expect the proposed acquisition to materially impact its earnings and net assets for the year ending June 30, 2015 but expected it to contribute positively to its long-term earnings.
Shares in the company rose three sen or 2.61% to RM1.18 yesterday.