TH Plantations buys more land from parent

KUALA LUMPUR: Shareholders of TH Plantations Bhd (THP) gave the thumbs-up to a half-a-billion-ringgit deal to buy more agricultural landbank from its parent Pilgrims Fund Board or Lembaga Tabung Haji (LTH).

"All shareholders, except our parent, approved of the acquisitions. They included those holding substantial stake like the Employees Provident Fund," THP chief executive officer and executive director Datuk Zainal Azwar Zainal Aminuddin said at a press conference after the company's extraordinary general meeting held here on Monday.

The RM535.64 million deal involves issuance of 209.23 million new THP shares at RM2.56 per share to LTH as payment for 100 per cent of TH Ladang (Sabah & Sarawak) Sdn Bhd and 70 per cent of TH Bakti Sdn Bhd.

This would result in LTH's 59 per cent stake in THP to increase to 71 per cent, while other investors' holding dilutes. Logically, these investors would only vote in favour of the deal if there had been a tacit understanding that LTH will, in due time, pare down its stake in THP.

Asked if those holding substantial stake in THP like the Employees Provident Fund and Yayasan Pok & Kasim voted in support of the deal, Zainal Azwar nodded and confirmed their approval.

He then said the proposed acquisition will most probably complete in the next 10 days. "This deal will more than double our landbank to 91,078ha and increase the total oil palm planted area from 38,154ha to 53,805ha," he said.

TH Ladang (Sabah & Sarawak) and its subsidiaries are in the business of managing oil palm, teak and rubber estates, while TH Bakti's focus is on oil palm estates.

On the outlook for the company, Zainal Azwar said RM725 million in capital expenditure will go to planting up oil palms across 23,000ha in the next four years until 2016.

Also present at the press conference was THP chairman Tan Sri Dr Yusof Basiron.

Last month, it was reported that Sabah Forestry Department had rejected the execution of the teak and rubber plantation development agreement with TH-Bonggaya.

In response, Yusof said THP had just received written approval from the Sabah Chief Minister's office. "The initial rejection was brought on by the issue of interpretation. Now, all parties are in agreement that LTH remain the licence holder while TH-Bonggaya carry on with the planting of teak and rubber trees."