KUALA LUMPUR: Oil palm company PLS Plantations Bhd is planning to expand into the durian business.
The company, in a filing with Bursa Malaysia today, said it had entered into a binding term sheet with Dulai Fruits Enterprise Sdn Bhd to exclusively explore and and negotiate the acquisition of a 70% stake in the durian seller.
“The proposed transaction is aimed to enable the company to venture into the downstream durian production and distribution businesses to provide additional revenue source and enhance the profitability of the group,” it said.
Under the plan, PLS intends to acquire up to 70% of Dulai for RM21mil.
The first 30% stake will be satisfied by RM3mil cash. PLS said it will acquire an additional 40% stake in Dulai for RM18mil via the issuance of 24 million new PLS shares at 75 sen each.
Dulai will provide a profit guarantee totalling no less than RM10mil for the financial years ending 2019, 2020 and 2021. Dulai is in the business of export and import of fresh or preserved vegetables and fruits.
PLS made a loss of RM3.9mil on revenue of RM76.3mil for the financial year ended March 31.
Malaysia exported more than 14,000 tonnes of durians last year, valued at RM70.68mil, the Agriculture and Agro-based Industry Ministry told the parliament in April. Previous news reports suggested that Malaysians consume more than 300,000 tonnes of durians every year.