PETALING JAYA: CB Industrial Product Holdings Bhd is divesting its stake in an Indonesian plantation unit through the sale of Admiral Potential Sdn Bhd (APSB), which owns a 94% stake in PT Jaya Jadi Utama (PT JJU), to London Stock Exchange-listed Anglo-Eastern Plantations Plc for RM38.25mil plus cash in the two subsidiaries.
In a filing with Bursa Malaysia, CB Industrial said PT JJU holds 7,169ha of oil palm land in Central Kalimantan, comprising 1,153ha of planted area and 5,772ha of plantable area.
As part of the agreement, APSB is required to acquire the remaining 6% equity interest in PT JJU to become its sole shareholder prior to the completion of the transaction.
“Upon completion of the transaction, APSB and PT JJU shall cease to be the company’s direct and indirect subsidiaries, respectively,” the filing said.
The disposal is expected to result in a loss of RM8.23mil, after accounting for the initial cost of investment of RM17.85mil, advances extended to APSB and PT JJU totalling RM47.12mil, and the acquisition of the remaining equity interest in PT JJU for RM2.3mil.
CB Industrial said the disposal will allow the group to unlock the value of its investment in loss-making APSB and PT JJU and recover RM47.1mil in advances extended to both entities as of the end of last year.
“The transaction enables CB Industrial to consolidate its business activities by disposing of non-performing units, reallocating resources to profit-generating units, and taking up more future business opportunities,” it added.
According to CB Industrial, the subscription price was determined on an arm’s-length basis between a willing buyer and a willing seller after taking into account the net liabilities and accumulated losses of the two subsidiaries.
Last year APSB and PT JJU recorded net liabilities of RM370,078 and RM2.79mil, respectively, with accumulated losses of RM370,080 and RM14.53mil.
