by BLOOMBERG / pic by TMR FILE

MALAYSIA’S pilgrimage fund is considering taking its agricultural firm TH Plantations Bhd private, people with knowledge of the matter said, amid a rally in palm oil prices.

Lembaga Tabung Haji (TH) has asked banks for proposals on the potential deal for the owner of palm oil and rubber plantations, one of the people said, asking not to be identified as the information is not public.

Shares in TH Plantations have risen 4% in the year to date, giving it a market value of about RM526 million. TH owns 73.8% of the company.

Discussions are in the early stages and TH could decide not to proceed with the plan, the people said. TH and TH Plantations did not respond to requests for comment yesterday.

The potential privatisation of the Kuala Lumpur-headquartered firm comes after palm oil prices reached an all-time high in May, triggering a flurry of deal activity among Malaysian planters.

Palm prices are expected to remain high due to lower production of palm oil and other oils, planters Sime Darby Plantation Bhd and FGV Holdings Bhd said this month following the release of their latest quarterly earnings.

The challenges of meeting environmental, social and governance requirements around issues such as sustainability and labour rights are contributing to consolidation in the sector, according to analysts.

The government in July announced plans to improve the fund’s management and operations, including a move to list it as a prescribed Islamic financial institution.