Rimbunan Sawit Bhd (RSB) (5113) plans to buy interests in nine plantation companies in Sarawak for RM286.1 million to grow its plantation land bank. The purchase will be paid through the issuance of 28.33 million RSB shares and 191.75 million new irredeemable convertible preference shares (ICPS) at a price of RM1.30 per share. The nine companies are Jayamax Plantation Sdn Bhd, Novelpac-Puncakdana Plantation Sdn Bhd, Lubuk Tiara Sdn Bhd, Pelita-Splendid Plantation Sdn Bhd, PJP Pelita Biawak Plantation Sdn Bhd, PJP Pelita Ekang-Banyok Plantation Sdn Bhd, PJP Pelita Lundu Plantation Sdn Bhd, PJP Pelita Selangau Plantation Sdn Bhd and PJP Pelita Ulu Teru Plantation Sdn Bhd. The acquisitions will see RSB own 100 per cent stake in Jayamax and a majority stake in the remaining eight companies.
The completion of the deal will see RSB’s total plantation land bank more than double from 31,645ha to about 91,000ha. About 53,000ha are yet to be planted. “The board believes that the proposed acquisitions will put the RSB Group on a strong footing to becoming a major player in the oil palm cultivation business in Malaysia,” the group said in its filing to Bursa Malaysia yesterday. The group also said the creation of an enlarged RSB Group would be capable of extracting greater business and cost synergies, while boosting the profitability and assets base. “In addition, the proposed acquisitions would also remove various existing related party transactions, thereby improving transparency for existing shareholders,” RSB said. Coupled with the establishment of a continued rehabilitation planting and replanting programme, the board believes that the profit contribution from the nine companies will grow in line with higher fresh fruit bunches yield per hectare when the average age profiles of the oil palms near maturity. The group is also proposing amendments to the Memorandum and Articles of Associations of RSB to facilitate the issuance of the ICPS. Source : Business Times