Global Palm Resources increasing land bank with Kalimantan acquisition
SINGAPORE (Dec 12): Global Palm Resources is acquiring 10,100 ha of oil palm plantation in Kalimantan to increase the company's land bank available for future cultivation.
The group on Wednesday entered into a conditional sale and purchase agreement to acquire a 95% stake in PT Bumi Raya Agro (PT BRU) for a $2.2 million. The sellers are PT Bumiraya Utama which holds a 94.98% stake and individual Swandono Adijanto who holds a 0.02% stake in PT BRU.
Incorporated in Indonesia, PT BRU holds a location permit to 10,100 ha of oil palm plantation in Kalimantan. As at the date of this announcement, the target company has yet to start production nor sale of crude palm oil nor palm kernels.
“The proposed acquisition is in the best interests of the group as it will enable the group to expand its sources of revenue and its current business operations, including the group's geographical coverage in Kalimantan and overall rate of production of fresh palm fruit bunches,” says Global Palm Resources in its Wednesday morning filing.
The proposed acquisition is considered an interested person transaction as Swandono is a sibling of Global Palm Resources’ executive chairman and CEO, Dr Suparno Adjianto and parent of executive director and COO Ivan Swandono. PT BRU is also a company controlled by the Adijanto siblings.
However, Global Palm Resources is not required to seek approval from its shareholders under Singapore Exchange’s listing rules as the total consideration represents 3.59% of the group's latest audited NTA value and the total value of all the transactions -- including the proposed acquisition -- entered into with Swandono and the Adijanto siblings year to date is 3.8% of the group's latest audited NTA value.
Year to date, shares in Global Palm Resources are down by nearly half to 20 cents at the close on Tuesday.
