KUB ENTERS SABAH TO BOOST ITS PLANTATION LANDBANK
PETALING JAYA, 19 APRIL 2017 – KUB Malua Plantation Sdn Bhd (‘KUB Malua’), a wholly-owned subsidiary of KUB Malaysia Berhad (‘KUB’ or the ’Group’) has today entered into a conditional Sale and Purchase Agreement with Kwantas Plantations Sdn Bhd (‘Kwantas’), a wholly-owned subsidiary of Kwantas Corporation Berhad to acquire a brownfield oil palm plantation land in Sungai Kinabatangan, District of Kinabatangan, Sabah measuring approximately 1,534 hectares (3,791 acres) for a cash consideration of RM100,448,621.
The total purchase consideration represents a discount of 13.4% from a market value of RM116 million, and will be funded via internally generated funds and/or bank borrowings.
The country lease on the land has a tenure of 999 years, expiring on 31 December 2887. The land, which has a total planted area of 1,503.05 hectares, produced 33,727 metric tonnes of fresh fruit bunches (‘FFB’) in 2016.
Commenting on the proposed acquisition, KUB’s President/Group Managing Director, Datuk Abdul Rahim Mohd Zin said, “We have been eyeing for a good brownfield plantation asset to acquire for the past year. We believe that this particular parcel, with its prime palm age and robust yield profile exceeding 20 tonnes per hectare combined with its strategic location, will be a positive addition to our overall plantation land bank.”
KUB currently has a total of four (4) parcels of oil palm plantations; two (2) in Johor and the other two (2) in Sarawak, with a total aggregate land size area of 7,332 hectares. Upon the completion of the Proposed Acquisition, the total plantation land bank will increase to 8,866 hectares.
“In line with the Group’s strategy to focus our financial resources in further expanding our core businesses, we are pleased that the growth plans for our Agro sector are now starting to gain traction. We are optimistic that this acquisition will provide immediate contribution to our earnings going forward and also deliver synergetic benefits to the plantation business,” continued Abdul Rahim.
The proposed acquisition is subject to shareholders’ approval at an extraordinary general meeting (‘EGM’) and is expected to be completed by the fourth quarter of 2017 (‘Q4 FY2017’).