The deal between TH Plantations and Tamaco is deemed undervalue, Ahmad Marzuk says
pic by TMR FILE
THE government is reviewing the disposal of large plots of land under TH Plantations Sdn Bhd to non-Bumiputera Tamaco Plantation Sdn Bhd, as the deal is deemed undervalued.
Deputy Minister in the Prime Minister’s Department (Religious Affairs) Ahmad Marzuk Shaary said plans to reduce TH Plantations’ 100,976ha landbank by more than three quarters at the end of 2017 via 19 subsidiaries will be reassessed.
The Pakatan Harapan (PH) administration in August last year decided to dispose of 14 subsidiaries under TH Plantations that owns 76,957ha or 76.2% of its total landbank. The deal would see the size of its total acreage reduced to 24,019ha.
Ahmad Marzuk said several deals are being finalised, including a RM7 million deal to dispose of TH Plantations’ 70% equity in THP-YT Plantation Sdn Bhd to TDM Bhd, a unit of the Terengganu state government. This, he said, was made at market price.
The size of land owned by THP-YT Plantations is 2,594 ha or 2.5% of TH Plantations’ total landbank.
However, Ahmad Marzuk said the sale of TH Plantations’ 100% equity interests in Bumi Suria Ventures Sdn Bhd and Maju Warisan Emas Sdn Bhd to Sabah-based Tamaco is undervalued.
“We are considering whether this move is reasonable or not,” he told the Dewan Rakyat.
The deputy minister was responding to a question by Tan Sri Noh Omar (Barisan Nasional-Tanjong Karang) who sought details on the proposed sale of assets at TH Plantations.
Ahmad Marzuk said independent valuer CH William in December 2018 and the Valuation and Property Services Department in April 2020 had priced the 6,513.8ha land of oil palm plantation in Bintulu and Sibu, Sarawak, at RM280 million and RM224 million respectively.
The sale to Tamaco was agreed at RM170 million. He said any sale to a non-Bumiputera entity is subject to review by the Economic Planning Unit (EPU).
“Why was the previous government so eager to sell the land to Tamaco, considering that crude palm oil prices are recovering? It is not impossible for the current government to cancel the sale,” he said.
TH Plantations first announced the sale to Tamaco in December last year. The disposal of the assets, which was done via a tender exercise, is part of the company’s rationalisation plan to revive its financial performance by divesting its assets to reduce borrowings and improve operational efficiency.
Former Minister for Religious Affairs Datuk Seri Mujahid Yusof Rawa (PH-Parit Buntar) said the decision to proceed with the deal was not to simply sell off assets owned by TH Plantations but to put a cap on the company’s debt that had swelled to RM1.29 billion in 2019.
This was also done to address losses from land assets amounting to RM71.6 million the same year.
TH Plantations’ land size had doubled from about 50,000ha to 100,000ha from 2012 to 2014, but activities to cultivate land were subdued, Mujahid said. Most of the companies to be sold are non-profitable.