KUALA LUMPUR: Boustead Plantations Bhd is selling part of its oil palm estate in Penang for RM136mil cash, reaping a huge profit that the company said it will use to repay loans taken for acquisition of new plantation land.
The planter, in a filing with Bursa Malaysia today, said it had entered into two separate sale and purchase agreements (SPAs) with two private companies for the disposal of three parcels of land totaling 138.9 hectares in Seberang Perai Utara.
Boustead Plantation said it will realise an estimated profit of about RM115.9mil upon completion of the proposed sales. This works out to an upfront gain of about RM834,000 per ha, increasing the company’s shareholders value by about 7 sen per share.
“Given the strategic location of the land, Boustead Plantation is able to unlock and realise higher return through the proposed sales,” it said.
The three parcel of land are part of of the group’s 677.8 ha Malakoff estate.
“Boustead Plantation will continue to own and operate its plantation business on the remaining 562.33 ha of Malakoff Estate,” it said.
The disposal, Boustead Plantations said, provided the opportunity for the group to use the realised funds for repayment of bank borrowings it had taken earlier for the purpose of strategic expansion.