GAP to raise RM230m from palm oil investment scheme

KUALA LUMPUR: Golden Agro Plantation (Mukah) Bhd (GAP) is expected to raise at least RM230 million if it sells all the lots offered under its palm oil investment scheme, said chief executive officer Datuk Alan Lim Kim Huat.

"As the management company, we hold a 30 per cent stake in the scheme. The remaining 70 per cent is divided into plots, each measuring a quarter acre. We're offering 29,240 plots for sale," he told a media briefing here yesterday.

According to GAP prospectus, subscribers can invest into this scheme at RM8,000 per plot. For this, they are guaranteed to receive a 7 per cent return annually for the first five years of the scheme.

 "As more and more people buy into this scheme, the price is expected to go up. The current RM8,000 per plot pricing is meant for early birds," he said.

Despite palm oil prices trading at relatively lacklustre level of RM2,300 per tonne, Lim assured this scheme is a viable long term investment option. Investors are advised not to compare this scheme with putting money with the bank.

"This is a long term investment scheme. Investors should not pull out early. There would be some people thinking of putting money in this scheme for five years since the annual return is 7 per cent, which is much higher than the current fixed deposit rate of 3 per cent," he said. 

 "Should an investor decide to pull out on the sixth year, he can sell his rights to a new or existing investor of this scheme at any price he can get. If the investor wishes to cash out on the seventh year, there is a buyback clause with the management company which states that he can only get back 85 per cent of what he put in. This is because we need to be fair to other investors of this scheme," Lim explained.

"We only guarantee a 7 per cent return on investment every year for the first five years. Other than that, we cannot promise the moon and the stars. We've crafted this scheme to be structurally sound so that investors know what they are buying into," he said.

Once the plantation starts to mature from the sixth year, investors will get to share profits with the management company. "From the sixth year onwards, we'll distribute 100 per cent of audited net profits to investors. The projected return on this scheme ranges between 7 and 23 per cent, depending on crude palm oil prices."

GAP is one of the few interest schemes registered with the Companies Commission of Malaysia that invest in the oil palm business.

 Licensed trustee My Premier Trustee (Malaysia) Bhd acts as trustee for GAP scheme investors while profits are audited by Crowe Horwath.