KLK to buy 95% of Indonesian palm oil company

PETALING JAYA: Kuala Lumpur Kepong Bhd (KLK) has agreed to buy a 95% stake in an Indonesian oil palm company with plantations in East Kalimantan for about RM300mil.

The proposed acquisition represents an opportunity for the group to acquire a company with brownfield oil palm plantations, KLK told Bursa Malaysia yesterday.

The target company, PT Putra Bongan Jaya (PBJ), was granted in 2009 the right to cultivate 11,602ha of land in Kalimantan Timur for a period of 35 years.

The right, KLK said, is generally renewable for a further period of 25 years.

“PBJ’s plantations have been planted with oil palm since 2009. It is projected that approximately 7,500ha would be planted as at completion,” KLK said.

The deal values PBJ’s land and plantation at US$80mil (RM312mil).

The purchase consideration will be based on PBJ’s land and plantation value, to be adjusted on the company’s working capital and other balance-sheet items.

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