PETALING JAYA: A company linked to Sarawak timber and media baron Tan Sri Tiong Hiew King is acquiring a 13.75% stake in Borneo Edible Oils Sdn Bhd (BEO) from two Main Market-listed companies, Subur Tiasa Holdings Bhd
and Rimbunan Sawit Bhd, for RM5.35mil cumulatively.
The acquiring company, Tiong Toh Siong Holdings Sdn Bhd (TTSH), is a major shareholder of both Subur Tiasa and Rimbunan Sawit.
Subur Tiasa told Bursa Malaysia it will be selling its 7.5% stake in BEO for RM2.94mil to TTSH, in which Hiew King has a 10.21% direct and 22.15% indirect stake.
Subur Tiasa is expected to make a loss of RM3.06mil from the sale of BEO, which is involved in the trading of crude palm oil and palm oil processing.
Meanwhile, Rimbunan Sawit is also expected to incur a loss of RM2.59mil from the disposal.
Rimbunan Sawit will be selling its 6.25% equity interest in BEO for RM2.41mil to TTSH.
Despite disposing of its stake at a loss, Subur Tiasa needs the deal to happen to enhance its cash flow and to mitigate further exposure to BEO’s deteriorating financial performance.
Audited accounts for financial year 2023 and 2024 (FY23-FY24) showed that BEO has been loss-making, with a gearing ratio of 5.86 times in FY24.
In FY22, the gearing ratio was 2.09 times.
Subur Tiasa said the disposal consideration of RM2.94mil translates to 49 sen per share, representing a premium of 22.2 sen per share or 82.8% above the net asset value of BEO as of Sept 30, 2024.
“The proposed disposal aligns with Subur Tiasa’s strategy to exit a non-core investment, recover a portion of investment cost, and allocate resources more effectively,” the company said in a filing with Bursa Malaysia.
The proposed disposal is expected to be completed by next March.
Rimbunan Sawit said the proceeds from the disposal will be used as working capital for its oil palm estates within 12 months after completion of sale.
“The proposed BEO disposal is in line with Rimbunan Sawit’s long-term strategy to focus on cultivation of oil palm and palm oil milling.
“As such, the proposed BEO disposal will enable Rimbunan Sawit to streamline and re-organise the operations of Rimbunan Sawit so as to be more focused on the core business of the group in the cultivation of oil palm and processing of fresh fruit bunches into crude palm oil,” its added.
Post-acquisition of the 13.75% stake from Subur Tiasa and Rimbunan Sawit, BEO will come under full control of Hiew King’s Rimbunan Hijau (Sarawak) Sdn Bhd which owns the remaining 86.25%.
