PETALING JAYA: Boustead Holdings Bhd said it will privatise its Islamic plantation REIT, Al-Hadharah Boustead REIT, at RM2.10 per share, confirming a StarBiz report on Monday.
In a statement, Boustead Holdings, the parent company of Al-Hadharah, said this would be followed by a listing of an enlarged Boustead Plantations Bhd to consolidate the group’s plantation assets in an exercise aimed at unlocking value.
Boustead Holdings’ plantation business is currently undertaken via its wholly owned subsidiary, Boustead Plantations, and its 53.6%-owned REIT.
In order for the proposed listing to commence, the group, via Boustead Plantations, would be undertaking the proposed privatisation of the REIT, it said.
At RM2.10, this represents a 12.3% premium over Al-Hadharah’s last share price of RM1.87 before it was suspended to make way for the announcement of the privatisation.
It is also a premium of 16.7% over the net asset value of Boustead REIT as at March 31 of RM1.80 per unit, or a premium of 13.5% above the REIT’s five-day volume weighted average price of RM1.85 prior to the suspension.
The privatisation will be undertaken via a proposed selective unit redemption and repayment exercise. Subsequently, Al-Hadharah will be converted from a collective investment scheme into a private property trust, with Boustead Plantations as the sole beneficiary.
The proposed selective unit redemption and repayment exericise is subject to regulatory and shareholder approvals at an EGM to be convened.
In its announcement to Bursa Malaysia, Boustead Holdings noted that the price of RM2.10 was close to Al-Hadharah’s record high of RM2.16 on Aug 24, 2012, and as such, provided an attractive exit point for the unitholders of the REIT.
Analysts contacted said the RM2.10 per share price tag appeared “fair”.
In the statement, Boustead Holdings deputy chairman/group managing director Tan Sri Lodin Wok Kamaruddin said the corporate exercise was being undertaken at the “right time and for the right reasons”.
“Today, we are faced with a shortage of mature plantation land with prime yielding trees, and current market prices for such assets are high, which give rise to the challenge of sustaining the expected yield for a REIT.
“This is supplemented with the high dividend distribution made by Al-Hadharah, which does not allow us to retain sufficient internal funds to engage in growth strategies,” he said.
Al-Hadharah gives its shareholders a decent dividend yield of around 5%, having declared dividends to the tune of RM62.7mil in financial year 2012.
The REIT is the country’s first Islamic plantation-based REIT and was listed in 2007.
It manages 12 oil palm estates and three palm oil mills in Peninsular Malaysia covering 19,945ha, while Boustead Holdings has an agriculture landbank of 81,333ha.
Both Boustead Holdings and Al-Hadharah shares will resume trading today after being suspended for two days.
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