KUALA LUMPUR: Genting Plantations Bhd have proposed a joint venture (JV) with two companies to develop and cultivate 74,000ha of palm oil plantation in Indonesia.
In a statement to Bursa Malaysia, the company through its wholly-owned subsidiary Sunyield Success Sdn Bhd had entered into a sale and purchase and subscription agreement with the vendor Global Agrindo Investment Company Ltd (GAIC) and the JV company Global Agripalm Investment Holdings Pte Ltd (GAIH). The agreement will involve up to US$116 million (RM355 million) cash.
Under the corporate exercise, up to US$66 million (RM202 million) would be use to acquire 495 ordinary shares of GAIH or 49.5 per cent stake from the GAIC. Meanwhile, the remaining US$50 million (RM153 million) would be used to subscribe for 371 new GAIH shares or 27.1 per cent of the enlarged share capital of GAIH.
The corporate exercise will see Genting Plantations owning 63.2 per cent in the enlarged share capital of GAIH. The proposed JV is expected to be completed by the end of second quarter this year.
Genting Plantations said the proposed JV is in line with the company's long term strategy to increase its interest in the palm oil industry as it wants to establish itself as a major player in the industry. The proposed venture will increase Genting Plantations' landbank in Malaysia and Indonesia to 239,950ha from the present 165,560ha.