Oriental to acquire plantation companies, oil palm estates in Malaysia and Indonesia for RM1.2b


CONGLOMERATE Oriental Holdings Bhd has announced plans to purchase remaining stakes in a number of oil palm plantations in Malaysia and Indonesia, as well as shares in plantation companies, for RM1.2 billion.

The slew of deals announced to the local stock exchange yesterday would allow Oriental to more than double its land bank in Malaysia and take full control over its sizable plantation land banks, with four palm oil mills, in Indonesia.

Oriental executive chairman and substantial shareholder Datuk Loh Kian Chong and four fellow directors have been deemed as interested directors in the various proposed deals.

The others are Oriental group MDs Datuk Robert Wong Lum Kong and Datuk Seri Lim Su Tong, executive directors Tan Kheng Hwee and Datuk Seri Tan Hui Jing as well as alternate director Datin Loh Ean.

Kian Chong, grandson of  the late Tan Sri Loh Boon Siew, is the nephew of Robert Wong, Loh Ean, Su Tong and the cousin of Hui Jing and Kheng Hwee.

In the exchange filing, Oriental said it proposed to acquire from Boon Siew Sdn Bhd (BSSB) the 49.50% equity interest it does not own in Selasih Permata Sdn Bhd (SPSB)  for RM646.93 million in cash.

It also plans to acquire from BSSB, Boon Siew Development Sdn Bhd (BSD) and Loh Boon Siew Holdings Sdn Bhd (LBS) a 60.5% stake in associate company Southern Perak Plantations Sdn Bhd (SPP) for RM155.33 million in cash.

In another deal, Oriental plans to acquire from BSSB 3.96 million ordinary shares in its  existing 50.50% owned subsidiary, Oriental Boon Siew (Mauritius) Pte Ltd, for RM1.

Oriental has also entered into conditional sale and purchase agreements with Boontong Estates Sdn Bhd (BESB) to acquire a number of oil palm plantation lands, including Bukit Langkap Estate in Penang for RM41 million, Bentong Estate for RM132 million and Thye Group Estate in Kuala Muda, Kedah, for RM224.1 million.

When completed, Oriental said the proposed acquisitions will see the group land bank in Malaysia increase from 4,958 ha to approximately 12,054 ha, with the new plantation includes a palm oil mill and comprises mostly planted and yielding oil palm trees.

The move will also allow the group  to obtain full control over the 96,168 ha of plantation land bank in Indonesia, of which approximately 37,214 ha have been fully planted with oil palms.

Explaining the rationale of the move, Oriental said its plantation segment will continue as a core and consistent contributor to the financial performance of the group over the medium to long term given the group’s familiarity with the plantation business and the importance of oil palm as not only a food source but also as a key manufacturing input for detergents, cosmetics, biofuels and other products.

Oriental shares ended yesterday’s trade one sen lower to RM6.39, giving it a market capitalisation of RM3.96 billion.