Kuala Lumpur Kepong Bhd (KLK), a prominent player in the plantation industry, along with its wholly-owned Singapore-based subsidiary, KLK Plantations and Trading Pte Ltd, has announced plans to acquire controlling interests in two Indonesian palm oil companies for a total sum of RM276.55 million. The proposed transaction, considered a related party deal, aims to secure over 90% ownership in both firms.
In an official filing on Thursday, KLK revealed its agreement with Whitmore Holdings Sdn Bhd, a wholly-owned subsidiary of Batu Kawan Bhd, which holds a 47.72% stake in KLK.
KLK’s acquisition entails a 92% share in PT Satu Sembilan Delapan (SSD) for RM264.1 million and a 90% share in PT Tekukur Indah (TI) for RM12.42 million.
“The estates managed by SSD and TI have been under KLK’s supervision since their inception, providing KLK with extensive insights into these properties and their economic potential,” stated the company.
The move is expected to streamline KLK’s plantation estates and consolidate its operations, positioning the acquired assets to serve as essential feedstock for KLK’s upcoming refinery and oleo complex in East Kalimantan, given their geographical proximity.
KLK intends to finance the acquisition through its existing cash reserves, which stood at RM2.38 billion as of September 30, 2023, among total assets amounting to RM30.13 billion.
The completion of the proposed acquisition is slated for the fourth quarter of this year.
On the stock market, KLK’s shares closed unchanged at RM21.50, reflecting a market capitalization of RM23.24 billion.