PRG gets shareholders' nod for RM89.2m purchase of teak plantations

  • Corporate News
  • Tuesday, 08 Oct 2019

KUALA LUMPUR: PRG HOLDINGS BHD has obtained its shareholders' approval for the purchase of two teak tree plantations worth RM89.20mil.

At the shareholders meeting on Tuesday, all the shareholders agreed to the proposed purchase of the plantations in Kelantan from Alifya Forestry Sdn Bhd in cash and shares.

PRG will pay RM59.20mil cash and issue 40.29 million shares at 74.45 sen each amounting to RM30mil to Alifya.

In a statement, it said the acquisition value of RM89.20mil was lower compared with the fair value of RM98.12mil as assessed by Raine & Horne International Zaki+Partners Sdn Bhd in the valuation report.

PRG's core activiti4es are manufacturing, property development, construction and healthcare businesses. The pruchase of the plantations would enable it to diversify and strengthen the group’s revenue base.

The first plantation is in Jajahan Gua Musang, measuring 137 hectares. It is an agriculture land with a 50-year leasehold period expiring on June 21,2053.

The second plantation, measuring 227.79 ha, in Jajahan Kecil Lojing also has a 50-year leasehold and will expire on Aug 7,2066.

The plantations are both classified as Malay reserve land. The acquisition is expected to be completed by end-December 2019.

PRG said the logging/harvesting of teak trees will be carried out in stages and expected to be completed within five years.

“PRG Agro had on Dec 14,2018 received the letter of intent from KNX Construction Sdn Bhd, a supplier of building materials, to purchase all timber harvested on and/or extracted from the lands.

“The estimated volume of timber on the lands is 150,000 cubic metres (based on raw log format) and it generates a potential value of RM180mil based on the value per cubic metre of RM1,200.00, ” PRG said.

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