Boustead buying Sandakan estate for RM397 million
Published on: Friday, July 20, 2018
Kuala Lumpur: Boustead Plantations Bhd is buying 4,915 ha of plantation land in Sandakan, Sabah, inclusive of a 75-tonne per hour palm oil mill, according to The Star.The indicative purchase price, according to a Bursa Malaysia filing, is RM397mil.The purchase consideration varies from an earlier filing on May 8, 2018, which said that the purchase consideration was RM433mil.
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In that May 8 filing, Boustead Plantations said its subsidiary Boustead Rimba Nilai Sdn Bhd was buying 5,531 ha of plantation land, including a 60-tonne per hour palm oil mill, for RM433mil.On Wednesday, Boustead Plantations said Boustead Rimba Nilai agreed to purchase the entire equity interest in Lubah Plantations (S) Sdn Bhd and Ever-Yield Sdn Bhd which own the plantations, both of which are subsidiaries of Sit Seng & Sons Realty.The plantation land comprises 17 titles held by the vendor and its subsidiaries in Beluran, Kinabatangan and Labuk and Sugut and a 75-tonne per hour palm oil mill. Meanwhile, Maybank Investment Bank Bhd (Maybank IB) reiterated a "hold" call on Boustead Plantations Bhd (BPB), with the company having lowered the purchase consideration for Sabah estates announced in May this year to RM397 million, a decline of eight per cent from RM433 million.
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"The lower cost mainly reflects the reduction in estate size to 4,917 hectares (ha), a decrease of 11 per cent," it said. Maybank IB said the underlying gross cost is relatively unchanged at RM69,000/ha and remains unattractive.
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"We believe Boustead Plantations will need to monetise more of its existing estate to fund this deal.Stay up-to-date by following Daily Express’s Telegram channel.
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