Premium Nutrients to sell downstream business to Carson group

KUALA LUMPUR: Shareholders of Premium Nutrients Bhd approved the sale of its flagship refinery and specialty fats business to Sri Lankan Carson group for RM117.95 million.

The disposal may turn Premium Nutrients into a PN17 company if the company does not venture into a new business within the time limit set by Bursa Malaysia. PN17 refers to a financially troubled entity due to it ceasing its business operations.

"About 99 per cent of our shareholders approved the sale of palm oil downstream business to Agro Asia Pacific Ltd, a unit of the Carson group," Premium Nutrients chairman Tan Sri K.R. Somasundram said. "The sale is scheduled to conclude next month."

He was speaking to Business Times in an interview after the company's shareholders meeting here yesterday.

Currently, Colombo-based Carson group via Goodhope Asia Holdings Ltd, its unit in Singapore, owns around 80,000ha of oil palm plantations in Malaysia and Indonesia. It produces and sells palm oil, palm kernel and fresh fruit bunches.

Apart from brewing for Carlsberg under a licence agreement in Sri Lanka, the Carson group also produces and sells beer under the Lion brand name.

Somasundram explained that Premium Nutrients had to sell the downstream business as it is unable to compete with big and integrated palm oil players, which are financially stronger and could leverage on economies of scale.

Following the sale, Somasundram said Premium Nutrients is likely to be classified PN17 status if the company does not venture into a new business within the time limit set by Bursa Malaysia. The trading of its shares would then be suspended and the counter, delisted.

"We have 12 months to regularise Premium Nutrients' business direction. The next board meeting is scheduled for next month. We're open to venturing into any kind of business that makes money. One of the options include property investment and development," he added.

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Premium Nutrients clarifies status

PREMIUM Nutrients Bhd has clarified that it would be a cash company upon completion of the disposal of its palm oil refinery complex and other downstream businesses. In this case, it will fall within the ambit of PN16 of listing requirement of the stock exchange. If the company does not venture into a new business within the time limit set by Bursa Malaysia, it could then be classified a PN17 company. 

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