Malaysia’s Golden Land Buys Two Oil Palm Plantations Abroad
Malaysia’s Global Land Bhd announced that it has entered into purchase and sales agreements to acquire controlling shares in two oil palm plantation companies with permits to develop 26,600 hectares in Indonesia for US$5.73 million.
Golden Land has secured an agreement with Hery Hermawan Herijanto to acquire 68.75% of Parimo Agri Holding Pte Ltd (PAH) for US$3.25 million and Parigi Plantation Holding Pte Ltd (PPH) for US$2.49 million. Although both companies are incorporated in Singapore, they both have registered subsidiaries in Indonesia with land permits. PAH holds 80% in PT Ampibabo Agro Lestari that has a permit for 15,067 hectares. PPH’s subsidiary, PT Agri Toribulu, has a land permit for 11,533 hectares, giving Golden Land the ability to expand elsewhere, after finding expansion in Malaysia difficult due to a scarcity of arable land and a significant shortage of labor.
The purchase price, which will be funded through internally generated funds and bank debt, will be paid in two tranches. The first tranche will be 20% of the total price, with the remaining 80% being paid upon closing of the deal, which is expected within five months.
Golden Land expects the acquisition to positively affect its long term earnings on expectations that global dependence on palm oil will climb as more soyoil is demanded for biodiesel production.
The acquisition is not subject to approval by shareholders, but will require approval by regulatory bodies in Indonesia.