KUALA LUMPUR: WTK Holdings Bhd
’s wholly owned subsidiary BioFarm Venture Sdn Bhd had entered into a conditional share sale agreement with Ocarina Development Sdn Bhd to acquire 9.8 million ordinary shares or 70 per cent stake in Durafarm Sdn Bhd for RM132.2 million cash.
The group noted that Durafarm is principally engaged in the business of planting and management of an oil palm plantation in Betong and Sri Aman, Sarawak with the principal market for the sale of fresh fruit bunches (FFB) solely in the Sarawak region.
In a filing with Bursa Malaysia today, the group said the purchase consideration payable shall be satisfied entirely via a combination of internally generated funds of WTK Group and bank borrowings and/or proceeds to be raised from the issuance of debt securities.
The group said WTK has an established presence in the oil palm cultivation business in Sarawak which includes upstream oil palm plantation activities and downstream palm oil mill operations and the plantation segment is expected to remain a key growth driver, following the acquisition of a plantation company.
Upon completion of the exercise, the oil palm planted area held by WTK will increase from 16,428.50 hectares to 20,439.07 hectares representing an increase of approximately 24.41 per cent or 4,010.57 hectares, it noted.
The exercise is in line with WTK’s long-term strategy to further expand its oil palm plantation business by acquiring new land banks to gain a larger foothold in the palm oil industry in Malaysia, it noted.
"This will expedite the strategic shift to become a more dominant plantation player with an enhanced publicly-listed profile while reducing its reliance on the timber business.
"The timber business continues to face challenges with log production anticipated to slow down due to the declining number of available natural logs and stricter operational requirements relating to timber certification,” it added. - Bernama
