NPC Resources to sell all its Sabah agriculture land

by ANIS HAZIM / pic credit:

NPC Resources Bhd is disposing of all of its four parcels of agricultural land in Sabah worth RM52.72 million to improve the group cashflow.

In a bourse filing last Friday, the group said its wholly owned subsidiary, Seraya Plantation Sdn Bhd, has entered into a conditional sale and purchase agreement (Land SPA 1) with Syarikat Kretam Plantations Sdn Bhd for the disposal.

“The three parcels of agricultural land were fully cultivated together with all the infrastructures, buildings, fixtures, fittings and assets,” NPC Resources said.

All of the lands (Land 1, Land 2, Land 3) were located in Kinabatangan, Sabah, at a total sales consideration of RM29.6 million.

At the same time, NPC Resources’ indirect 70% owned subsidiary, Bonus Indah Sdn Bhd, also proposed to dispose of another parcel of agricultural land for the sale consideration of RM23.12 million.

It stated that Bonus Indah has entered into a conditional SPA (Land SPA 2) with Syarikat Kretam for the disposal of a parcel of agricultural land.

The land (Land 4) was also fully cultivated together with all the infrastructures, buildings, fixtures, fittings and assets located in Kinabatangan, Sabah.

According to NPC Resources, the lands only contributed 3.6% of the total crops for the group which has an insignificant impact on its performance.

“Post completion of the proposed disposals, NPC Resources still owns approximately 10,776ha of plantation land in Sabah, approximately 45,064ha in Indonesia and two palm oil mills,” it stated.

It will also enable the group to accelerate its planting programme to develop its remaining unplanted plantation land in Indonesia and replanting programme in Sabah.

“Upon maturity, the board expects the plantation land to contribute significantly towards the group’s financial performance,” it added.

The group also views that the proposed disposals will be able to improve its cashflow position.

It said the proceeds will be utilised within one year to repay term loans or overdraft or revolving credits, and paying its real property gains tax and incidental cost in relation to the proposed disposals.