KUALA LUMPUR – Boustead Holdings Bhd’s (Boustead) move to dispose of a 33 per cent stake in Boustead Plantations Bhd (BPlant) to Kuala Lumpur Kepong Bhd (KLK) was necessary to resolve its cash flow problem and as debt settlement before the end of its financial year on Dec 31, 2023.
Defense Minister Datuk Seri Mohamad Hasan said the Armed Forces Fund Board (LTAT) and Boustead still have the opportunity to be among BPlant’s main shareholders after the completion of the transaction.
“This is important to prevent Boustead from going bankrupt if the debt is not settled on time.
“This strategic collaboration also has the potential to create high added value for LTAT and Boustead because they are given priority rights to develop two farmland spanning 720 hectares, with a gross development value of approximately RM8 billion,” he said.
He said this during the winding-up of the debate on the 12th Malaysia Plan Mid-Term Review for the Ministry of Defense in the Dewan Rakyat, today.
Additionally, Mohamad said that although BPlant has been profitable, its profits over the past few years were due to its disposal of plantations and the significant increase in crude palm oil prices.
As such, the company needs stronger resources and fiscal standing to start replanting, he said.
Currently, almost 49 per cent of BPlant’s oil palm trees are more than 20 years old, and the company recorded the lowest fresh fruit bunches (FFB) yield at 13.3 tonnes per hectare compared to other oil palm plantation companies. – BERNAMA