Seven, including four Malaysians, set sights on NBPOL

PETALING JAYA: The race to acquire a major stake in New Britain Palm Oil Ltd (NBPOL) has further intensified, with seven parties expressing interest, including four Malaysian plantation giants.

The others are two plantation groups from Indonesia and Singapore’s Wilmar International Ltd. The Indonesian companies are the Sinar Mas group and RGE Group, said sources.

Apart from Felda Global Ventures Holdings Bhd (FGV), sources said the other Malaysian companies are Sime Darby Bhd, Kuala Lumpur Kepong Bhd (KLK) and IOI Corp Bhd.

The parties have expressed interest following a competitive bidding exercise that was conducted by bankers appointed by Kulim (M) Bhd, which is keen on divesting its 48.97% interest in listed NBPOL.

“Apart from pricing, the other factor that would be key is that the plantation group should be acceptable to the existing management of NBPOL,” said a source.

On that score, Wilmar has an edge because it already has a working relationship with NBPOL.

The Papua New Guinea (PNG)-based NBPOL has 77,000ha of oil palm plantations in PNG and the Solomon Islands, 12 palm oil mills and one refinery each in PNG and Liverpool. The group is also the largest sugar and beef producer in PNG through its over 7,700ha of sugar cane plantations and 9,200ha of grazing pastures, as well as a seed production and palm breeding facility.

NBPOL is a major employer in that country and tends to garner special attention from the PNG government.

In recent months, there has been increasing interest among top regional plantation players to acquire NBPOL, which has a market capitalisation of £612.62mil (RM3.36bil).

Of the seven contenders, only FGV has confirmed its interest in NBPOL, which is dual-listed on the London Stock Exchange and the Port Moresby Stock Exchange.

Cash-rich FGV has described its potential foray into PNG as part of its growth strategy. If FGV does enter PNG, then it would be the third Malaysian plantation company to make foray into the country after KLK and Kulim, which, in turn, is also NBPOL’s single-largest shareholder.

For KLK, it could be part of its bigger expansion plan into PNG after having acquired a 51% stake in Singapore-incorporated Collingwood Plantations Pte Ltd in 2012 for US$8.66mil (RM26.86mil), which has a huge 44,342ha of greenfield land in PNG. However, KLK has run into problems developing the greenfield land into oil palm plantations, as it has met with stiff resistance from local landowners.

Other contenders such as IOI, Sime Darby, Sinar Mas and Wilmar are also eyeing NBPOL for expansion purposes that would present them with an opportunity to develop new oil palm plantations in view of the increasing difficulty and expenses to source for suitable land in Malaysia and Indonesia.

Although it owns a substantial stake in NBPOL, Kulim, the plantation arm of Johor Corp, has not been able to exert its influence on the PNG company.

Last year, Kulim had expressed interest to up its existing stake in NBPOL by another 20%. It then proposed to partially acquire up to 30 million shares in NBPOL at £5.50 (RM27.24) per offer share at a total cash consideration of about £165.05mil (RM812.3mil).

However, the proposal was met with strong resistance; from the rejection by NBPOL’s independent advisers right down to the restraining order imposed by the Securities Commission of Papua New Guinea (SCPNG) and the National Court of Papua New Guinea, which subsequently dismissed Kulim’s application to lift the SCPNG order. After the failed attempt, Kulim is now keen to dilute its stake in NBPOL.

Other major shareholders of NBPOL are West New Britain Provincial Government (8%) and Pacific Rim Plantation Services Pte Ltd (4.49%), which is a company that is owned by the management of NBPOL.

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