KULIM (Malaysia) Bhd had accepted a conditional offer from Johor Corp (JCorp) to acquire 62.03% stake in Kumpulan Bertam Plantations Bhd and 100% interest in EPA Management Sdn Bhd.
Kulim proposed to acquire the 62.03% interest in Kumpulan Bertam for RM13.186mil via RM6mil in cash and issuance of 3.124 million new Kulim shares to be issued at RM2.30 each, Affin Merchant Bank told the KLSE.
For the acquisition of EPA, the purchase price of RM80mil would be via RM35mil cash and issuance of 19.565 million new Kulim shares.
Kulim has proposed a renounceable rights issue of up to 70.805 million new shares together with 70.805 million detachable free warrants on the basis of one new share with one warrant for every four existing shares held in Kulim before the acquisitions.
The proposed rights issue would raise fresh equity funds to finance the cash position of the proposed acquisitions.
Affin said the proposed acquisitions would increase Kulim group's plantation holdings by 74,226ha.
As EPA currently managed the estates and mills owned by Kulim and the JCorp group of companies, Affin said the acquisition of EPA would enable Kulim to realise annual cost savings in relation to consultancy services and enlarge the earning base of the group.
Before EPA is acquired by Kulim, EPA would undertake an internal restructuring which include retention of certain identified Indonesian units owning palm plantations with areas totalling 73,199ha in Sumatra and Kalimantan.
Affin said as Kulim also owned plantation assets in Indonesia, the proposed acquisition of EPA would bring about economies of scale for the group. Bernama