KUB Malaysia Bhd received shareholders’ approval at its Extraordinary General Meeting (‘EGM’) yesterday, for the acquisition of a brownfield oil palm plantation land in Sungai Kinabatangan, District of Kinabatangan, Sabah measuring approximately 1,534 hectares (3,791 acres) through its wholly-owned subsidiary, KUB Malua Plantation Sdn Bhd (‘KUB Malua’),for a cash consideration of RM100,448,621.
The land is being acquired from Kwantas Plantations Sdn Bhd (Kwantas), a wholly-owned subsidiary of Kwantas Corporation Berhad.
The acquisition is in line with the Group’s strategy to expand its plantation landbank and improve the earnings contribution from its plantation sector. This acquisition will increase KUB’s total plantation land bank from 7,332 hectares to 8,866 hectares.
The brownfield land has a robust yield profile exceeding 20 tonnes per hectare, and is expected to generate immediate revenue and contribute positively to the earnings of the Group.
Commenting on the proposed acquisition, KUB’s President/Group Managing Director, Datuk Abdul Rahim Mohd Zin (pix) said, “We are pleased to have the support of our shareholders which is a validation of the Group’s strategic plans put forward previously. We believe that this acquisition will not only enhance shareholders’ returns but will provide us with the momentum to deliver our growth story for the Agro sector particularly in increasing our landbank to 10,000 hectares in the next few years.”
“We are also optimistic that the Group will deliver another good year following the encouraging first quarter results for the current financial year ending 31 December 2017 (“FY2017”). We will continue to focus on our core earnings drivers and keep our eyes on the Group’s long term objectives.” added Abdul Rahim.
The Acquisition is expected to be completed by the fourth quarter of 2017 (‘Q4-FY2017’).