IJM Plantations sales proceeds to be invested

In a circular to shareholders yesterday, IJM Corp said it will be utilising 28% or RM430mil of the proceeds to strengthen the group’s earnings. (File pic shows an IJM Plantation.)

KUALA LUMPUR: IJM Corp Bhd, which is disposing of its entire 56.2% stake in IJM Plantations Bhd to Kuala Lumpur Kepong Bhd (KLK) for RM1.53bil, will be allocating part of the proceeds for future investment opportunities and capital expenditure.

In a circular to shareholders yesterday, IJM Corp said it will be utilising 28% or RM430mil of the proceeds to strengthen the group’s earnings.

“IJM Corp is continuously on the lookout for viable investment opportunities in relation to our group’s businesses. The earmarking of the proceeds will provide our group with readily available funds to undertake viable investment opportunities as and when they arise.”

The company noted, however, that it had yet to identify any suitable or viable new investment opportunity. “The earmarked proceeds may also be used for capital expenditure in existing business, concession assets and investment properties.”

Additionally, IJM Corp said it will be utilising 52.1% or RM800mil of the proceeds for capital management activities.

The company said this would include (but not be limited to) an indicative special cash dividend to its shareholders amounting to approximately RM542mil, which translates into an indicative dividend per share of 15 sen based on 3.61 billion IJM Corp shares as at June 30, 2021.

“The quantum of the final special dividend is subject to our board’s final deliberation taking into consideration, inter-alia, our group’s future plans and the number of outstanding shares in our company as at the entitlement date, of which the relevant announcement will be made in due course.

“Subject to prevailing market conditions, our company may utilise the remaining proceeds to undertake share buy-back activities at prices which our company deems favourable.”

It added that any excess in funds allocated for capital management activities will be utilised for future investment opportunities/ capital expenditure and/or general working capital purposes. IJM Corp said it will also be allocating RM300mil for general working capital purposes.

Separately, independent adviser Mercury Securities has advised IJM Plantations’ minority shareholders to accept KLK’s takeover offer, as it deems the deal to be “fair and reasonable”.

It said the effective disposal price of RM3.20 (being the aggregate of disposal consideration and interim dividend) represented a premium of RM1 (or 45.45%) over the last traded market price of IJM Plantations shares on the last trading date (LTD) as at June 4, 2021.

It also said the disposal price represented a premium of between RM1.0874 (51.47%) and RM1.3153 (69.79%) over the five-day, one-month, three-month, six-month and one-year volume-weighted average market price of IJM Plantations shares up to the LTD.

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