Oriental Holdings buys Indonesian firm to boost plantation business

by **Cals** Wed 04 Mar 2015, 01:22

Oriental Holdings buys Indonesian firm to boost plantation business

By Gho Chee Yuan / theedgemarkets.com | March 3, 2015 : 4:22 PM MYT

KUALA LUMPUR (March 3): [size=14]Oriental Holdings Bhd ([You must be registered and logged in to see this image.] Financial Dashboard), controlled by the family of the late tycoon Tan Sri Loh Boon Siew, has acquired a 90% equity interest in Sumatera-based PT Surya Agro Persada fromPT Kencana Sawit Abadi for RM98.32 million.

In a filing with Bursa Malaysia today, Oriental Holdings (fundamental: 2.5; valuation: 2.4) said its indirect subsidiary OAM Asia (Singapore) Pte Ltd (OAMA) had yesterday received nod from Indonesia's Ministry of Law andHuman Rights for the stake acquisition.

OAMA is a wholly-owned unit of Oriental Boon Siew (Mauritius) Pte Ltd (OBSM), which in turn is a 50.5%-owned subsidiary of Oriental Holdings. The remaining 49.5% in OBSM is owned by Boon Siew Sdn Bhd.

Subsequent to the acquisition, OAMA will own 90% of Surya Agro Persada and the remaining 10% is held by Kencana Sawit Abadi, said Oriental Holdings in a filing with Bursa Malaysia today. Kencana Sawit Abadi is 99% owned by PT Tradisi Bina Usaha and 1% held by Ruddy Samuel.

Surya Agro Persada is involved in the cultivation of oil palm plantation. It holds a concession for parcels of land totalling 11,889ha in Rawas Llir and Muara Lakitan, South Sumatera.

"The parcels of land are located strategically next to the existing concession owned by another subsidiary of the group and will be cost effective," said Oriental Holdings, adding that the acquisition will further enhance its plantation division’s contribution to the group's performance in the future.

"Of the total land, more than 2,871ha have been planted and harvesting has started in some areas," it added.

The group plans to fund the acquisition by bank borrowings.

As at 3.08pm, Oriental Holdings shares were traded at RM7.09, down two sen or 0.28%. Some 58,100 shares changed hands. It has a market capitalisation of RM4.411 billion.

[size=12](Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)[/size]
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