By DASHVEENJIT KAUR / Pic By BLOOMBERG
TA ANN Holdings Bhd plans to acquire a 30.39% equity interest in Sarawak Plantation Bhd for RM169.94 million, or RM2 per share.
The timber and oil palm concern will acquire the stake from Sarawak Plantation’s largest shareholder, Cermat Ceria Sdn Bhd.
The proposed acquisition is deemed as a related-party transaction as Ta Ann’s chairman and major shareholder Datuk Abdul Hamed Sepawi is also a controlling shareholder in Cermat Ceria.
Upon completion of the proposed acquisition, Ta Ann will emerge as the single-largest shareholder of Sarawak Plantation.
However, the company does not have the power to govern the financial and operating policies of Sarawak Plantation.
Abdul Hamed is also the executive chairman of Sarawak Plantation. The Sarawak state government is the second-largest shareholder in Sarawak Plantation with a 25.47% stake.
The proposed acquisition is consistent with Ta Ann’s plan to further expand its oil palm plantation business and gain a larger market access in the state of Sarawak, the company noted in its exchange filing yesterday.
Sarawak Plantation Group has a total planted hectarage of 34,837ha, which comprises 26,825ha of mature area and 8,012ha of immature area. Sarawak Plantation’s oil palm estates are predominantly located at Niah and Mukah, Sarawak.
“The proposed acquisition represents a strategic investment by the company, enabling the firm to participate in the future production of Sarawak Plantation,” Ta Ann said.
Taking into account the company’s 30.39% participation in Sarawak Plantation’s plantation estates after the completion of the proposed acquisition, the planted area of the group is expected to be enlarged by 23%.
In terms of source of funding, Ta Ann said the purchase consideration will be fully satisfied in cash and funded via internally generated funds and/or bank borrowings, the breakdown of which has yet to be finalised at this juncture.
The company expects to complete the acquisition by the first quarter of this year, pending approvals from shareholders and other relevant authorities.