Lembaga Tabung Haji (TH) has conditionally accepted a proposal from an Indonesian-based company to acquire 95% of its equity interest in PT TH Indo Plantations (THIP), according to a spokesperson from TH.
THIP is estimated to be worth RM2.3 billion, which includes 83,879ha of plantation land, one kernel crushing plant, six palm oil mills and one biomass plant in the province of Riau, Indonesia.
If the deal goes through, TH is expected to make at least RM2.19 billion, which is to be satisfied via cash payments.
It is understood that TH is actually discussing a price of above the market valuation of RM2.3 billion to sell the assets and has principally approved the deal.
“The board of TH has principally approved the deal, subject to regulatory approvals from the Indonesians,” said the spokesperson, declining to reveal the identity of the Indonesian buyer.
In a statement recently, TH group managing director/chief executive officer Datuk Ismee Ismail said TH had received the proposal in February 2011.
“TH expects to utilise the proceeds from this divestment to be invested in other plantation assets.
Plantation will continue to be one of the main investments sectors in TH, taking into consideration its steady cashflow and long-term prospects.
“We believe that the offer received provides a good opportunity to realise the appreciation in value of its investment in THIP,” he added.
THIP owns and operates 83,879ha of oil palm plantations since 1997.
Compared to the value of its initial investment, the offer received will provide a favourable return on investment.
“Transactions such as this will definitely benefit our depositors directly,” Ismee said.
He added that TH will continue its efforts to manage its investment responsibly in the best interest of its seven million depositors, while ensuring competitive returns.