KUALA LUMPUR: Ta Ann Holdings Bhd is acquiring 84.97 million ordinary shares, or 30.4 per cent stake, in Sarawak Plantation Bhd (SPB) from Cermat Ceria Sdn Bhd for RM169.94 million or RM2 a share.
The acquisition is consistent with the company’s plan to further expand its oil palm plantation business and gain larger market access in Sarawak, according to a filing to Bursa Malaysia today.
Taking into consideration the scarcity of sizeable and suitable oil palm plantation land in Sarawak, the acquisition represents a strategic investment by the company to acquire a substantial stake in SPB, hence according TAHB access / participation in the future production of SPB’s estates.
The purchase will be fully satisfied in cash and funded via internally generated funds and/or bank borrowings.
Ta Ann said the oil palm age profile of SPB is relatively young with approximately 41 per cent immature and young mature and 50 per cent prime mature.
Accordingly, as the oil palms enter into maturity as well as move into higher yielding age bracket, SPB’s oil palm yields are poised to further improve and the growth momentum in SPB’s earnings is expected to continue in the future financial years.
After taking into consideration the potential of SPB’s oil palms as well as its strategic location in Niah and Mukah in which the Group currently does not have presence in, the acquisition offers an opportunity to expand its oil palm plantation footprint in Sarawak via participation in the production as well as future growth of SPB’s plantations.
Besides that, the acquisition may also create an avenue for the company to explore potential collaboration / joint venture opportunities with SPB for acquisition and/or development of plantation lands in the future.