Harn Len proposes RM54.72mil acquisition to diversify plantation business

KUALA LUMPUR: Harn Len Corp Bhd has entered into a conditional share sale agreement with Datuk Mohamed Nizam Mohamed Jakel, the group chief operating officer of Jakel Group, for the proposed acquisition of 100% equity interest in Almal Resources Sdn Bhd for RM54.72mil.

In a statement, it said RM21.9mil or 40% of the purchase consideration is to be satisfied via the issuance and allotment of 31.27 million new Harn Len shares at an issue price of 70 sen per share, while the remainder will be paid in cash.

The group said the proposed acquisition will provide it with an opportunity to diversify its plantation business to crops other than oil palm.

Almal Resources has 100% equity interest in Pahang Coconut Valley Corp Sdn Bhd, which owns the rights to a 60-year lease of plantation land in Rompin, Pahang.

According to Harn len, the plantation land is currently planted with pineapple and oil palm, which should contribute towards the group's earnings moving forward.

"Pineapple plantations typically have a shorter crop life cycle compared to oil palm plantations, hence, Harn Len believes that the pineapple plantations may be able to generate accelerated revenue for the Group and reduce its reliance on oil palm plantations.

"In addition, as pineapple is considered a food security crop, it will allow the group to play its part in contributing towards Malaysia’s National Agrofood Policy 2.0 for food stability," it said.

Following the acquisition, Harn Len's land bank would grow to 46,777.1 acres from 42,724.5.

Upon completion of the acquisition, Nizam will be a substantial shareholder in Harn Len with 5.5% equity interest.

According to Harn Len, Nizam is a businessman involved in the day-to-day operations of his family business, Jakel Group, which is primarily engaged in textile retailing and manufacturing as well as property development.

It said Nizam is also a director and shareholder of several private companies.