It sells land in Semenyih and buys plantation in Yong Peng
PETALING JAYA: Sime Darby Bhd is selling a huge tract of land in Semenyih, Selangor, to sister company I&P Group Sdn Bhd for RM428.8mil cash.
The plantation giant said it would use the proceeds from the disposal to develop its strategic property projects. It is also buying two oil palm estates and a mill, all in Yong Peng in Johor, from I&P for RM106.7mil cash.
“This is a deal that makes sense for both parties,” Sime Darby president and group chief executive officer Tan Sri Mohd Bakke Salleh said in a statement.
“We were able to match our needs in line with our growth plans,” he added.
The past few weeks have been a busy period for Sime Darby on the corporate front.
Earlier this week, the company said it would issue new shares to select investors in a private placement to raise RM2.36bil.
It is also going ahead with plans to monetise its industrial assets in Australia.
In a separate development last month, Sime Darby disposed of its entire stake in a property investment firm in Singapore for RM249mil.
The latest deal announced yesterday is a significant one for Sime Darby’s plantation division, as it is the first time since 2007 that the group is acquiring a plantation area in Malaysia.
Sime Darby Plantation has proposed to acquire two oil palm estates measuring 769ha and a mill in Yong Peng, Johor, from I&P Group for RM106.7mil.
It is buying the oil palm estates and mill from Yong Peng Realty Sdn Bhd (YPR) and Perusahaan Minyak Sawit Bintang Sdn Bhd (PMSB). YPR owns Lian Seng Estate in Batu Pahat and Talisman Estate in Kluang, Johor. About 98% of both estates, which are near Sime Darby Plantation estates in central Johor, are planted with oil palm. PMSB owns a 70-tonne-per-hour oil mill, which is licensed to process 360,000 tonnes of fresh fruit bunches a year.
In addition, Talisman Estate has the potential for property development, as it is located about 12km away from Kluang.
“This is a rare opportunity for us to acquire quality brownfield estates in Peninsular Malaysia. Not only will we get immediate earnings, but we will also be able to deliver more value-generating synergies and cost savings by sharing estate and mill management,” said Sime Darby Plantation managing director Datuk Franki Anthony Dass.
The largest number of Sime Darby’s oil palm estates and mills are in Johor, currently with 27 estates and six mills in the state.
According to its website, the group has a total of 126 oil palm estates in Peninsular Malaysia, Sarawak and Sabah.
Sime Darby Property, in turn, will unlock the value of its Semenyih land to fund strategic property development projects such as the Malaysia Vision Valley and City of Elmina.
As for the sale of the land in Semenyih, The Glengowrie Rubber Company Sdn Bhd (GRC), a subsidiary of Sime Darby Property, has proposed to dispose of the two parcels of land, measuring 805 acres, to Petaling Garden Sdn Bhd, which is a subsidiary of I&P Group.
Sime Darby said the land, which is located in the Hulu Langat district, was not a key development focus area for its property arm.
As the disposal is a related party deal due to Sime Darby and I&P Group sharing common major shareholders, it will require the approval of GRC’s minority shareholders.
The land disposal and asset acquisition are not conditional upon one another.
