KUMPULAN Guthrie Bhd's proposed rationalisation exercise is seen by plantation analysts and industry observers as a move by the plantation giant to position itself as a global plantation player on its own, and not as part of the government's proposed merger of all Permodalan Nasional Bhd (PNB)-linked plantation companies.
Plantation analysts that StarBiz spoke to concurred that Guthrie's proposed rationalisation was timely and came as no surprise, since many plantation companies within the PNB fold are intensively undergoing internal restructure.
Apart from Guthrie and its subsidiaries Guthrie Ropel Bhd (G Ropel) and Highlands & Lowlands Bhd (H&L), other PNB-linked plantation companies include Sime Darby Bhd, Island & Peninsular Bhd, Austral Enterprises Bhd and Golden Hope Plantations Bhd.
MIDF Sisma analyst and economist Azrul Azwar said: I believe Guthrie is trying to make the point that it is capable of standing on its own domestically and abroad, particularly through its investment in the Minamas plantation in Indonesia.
He said the proposed rationalisation would provide an avenue for Guthrie to take advantage of opportunities for continued growth and to improve operational efficiency on an enlarged share capital and substantially larger hectarage.
The rationalisation plan would raise Guthrie's shareholders' funds to RM3.82bil from RM2.80bil, while diluting the government's stake in the company, Azrul said.
Another indication that Guthrie is not too keen to be merged with other PNB-linked plantation companies is that Guthrie group chief executive Tan Sri Khalid Ibrahim, who owns 38 million shares or a 3.8% interest in the company, could still up his stake by exercising his options, which would give him a 10% stake in the group.
Meanwhile, Nazir Razak, the chief executive and managing director of Commerce International Merchant Bankers Bhd, Guthrie's financial adviser, said: Guthrie's rationalisation will raise the group's consolidated shareholders' funds by RM1bil; and depending on how the market responds, there is potential for Guthrie to be one of the top 20 KLSE-listed companies.
He said the liquidity of Guthrie's shares would also improve under the rationalisation exercise as the stake of Guthrie's single largest shareholder, PNB, would be reduced to 62.3% from 72.3%.
These objectives are consistent with the government's plan to encourage further consolidation of corporate Malaysia to create healthier, well-capitalised companies, Nazir said, adding that Guthrie's rationalisation bodes well for the plantations industry.
Khalid told a media briefing in Kuala Lumpur yesterday the company's proposed rationalisation plan would see the de-listing of subsidiaries G Ropel and H&L, and a substantial increase in its plantation hectarage.
Guthrie would acquire an additional 75,000ha of plantation land through its acquisition of the remaining shares in G Ropel and H&L, adding to the group's current total hectarage of 110,000ha in Malaysia and 200,000ha in Indonesia.
The group's property unit, Guthrie Property Development Holdings Sdn Bhd (GPDH), will drive its property development business and assume the listed status of H&L, while G Ropel's listed status will be disposed of later.
The exercise involves the issuance of 302.24 million new Guthrie shares to GPDH, which in turn will issue 247.29 million shares to the minority shareholders of H&L. For its purchase of G Ropel, Guthrie would issue 96.38 million shares to the minority shareholders.
The exercise, slated for completion by June next year, would also see H&L disposing of two parcels of land totalling 640ha near Bukit Raja and Kapar to GPDH for RM210mil cash.
Khalid said Guthrie would focus on the palm oil plantation business, while GPDH would spearhead the property development business.
On GPDH's prospects, he said: Building on the success of Guthrie's Bukit Jelutong development, and upon completion of the 25km Guthrie Corridor Expressway, growth prospects for GPDH look promising for the next 20 to 30 years.''
Khalid said the exchange ratios were fair, reflecting an effective offer price of RM3.97 per share for H&L and RM4.19 per share for G Ropel. H&L last traded at RM3.30, and G Ropel at RM3.50, before trading in their shares were suspended on Thursday afternoon. The proposed rationalisation allows the minority shareholders of H&L and Ropel to unlock their shareholdings at a premium to market price for better capitalised and focused listed entities.
Khalid also pointed out that the proposed exercise, coupled with a plan to list its Minamas plantation company in Indonesia by 2005, would again give the group's plantation operations more liquidity in the market.