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UNITED Malacca Bhd is acquiring full ownership of Indonesian oil palm company PT Lifere Agro Kapuas (LAK) in a US$10 million (RM42.25 million) deal, marking a strategic move to consolidate its regional plantation assets.
The group will acquire the remaining 17% effective equity interest in LAK from PT Bank OCBC NISP Tbk.
This will be executed through the purchase of an 11.8% stake in International Natural Resources Pte Ltd (INR), which holds a 94.1% stake in LAK, and a 5.9% direct stake in LAK itself.
The acquisitions will be undertaken by United Malacca and its wholly-owned unit, Vintage Plantations Sdn Bhd.
Following the transaction, United Malacca will have full control over both INR and LAK, positioning them as wholly-owned subsidiaries.
The company said the deal aligns with its long-term strategy to expand its plantation operations in Southeast Asia.
Full ownership is expected to improve decision-making and resource allocation, potentially boosting profitability and allowing for more holistic development of LAK’s operations.
The deal includes an escrow arrangement whereby OCBC will deposit USD1.1 million to cover any contingent tax liabilities of LAK, pending a final ruling by the Indonesian Tax Court.
The consideration will be funded entirely from internal cash reserves.
The acquisition is classified as a related party transaction (RPT), as OCBC is linked to United Malacca via its parent company OCBC Singapore, a deemed substantial shareholder through Great Eastern Life Assurance (Malaysia) Bhd.
The group expects the acquisition to contribute positively over the long term.
The group added that it remains optimistic about its future prospects, with fresh fruit bunch (FFB) output expected to rise in the coming years as more plantation areas reach maturity, including those in LAK.
United Malacca’s audit committee said the terms of the deal are fair and reasonable, adding that it is in the best interest of the group and does not prejudice minority shareholders. — TMR
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