Astral Asia calls off Sarawak oil palm plantation buy

TheEdge Tue, Aug 09, 2016 10:06am - 7 years View Original


This article first appeared in The Edge Financial Daily, on August 9, 2016.

 

KUALA LUMPUR: Astral Asia Bhd has called off its plan to acquire 35,000 acres (14,164ha) of oil palm land in Sarawak. It said its subsidiary Astral Plantation Sdn Bhd and vendor Sima Properties Holdings Sdn Bhd were unable to reach an agreement on the deal.

They have decided to terminate the memorandum of agreement they signed on May 10, it said in a filing with Bursa Malaysia, adding that the refundable deposit of RM500,000 will be refunded to Astral Plantation.

Astral had proposed to acquire Paramount Estate Sdn Bhd from Sima Properties. Paramount owns 80% of Paramount Pelita Kapit Sdn Bhd, which holds the provisional leases to 13 pieces of land in Sarawak measuring about 35,000 acres.

Astral had said that the proposed acquisition represented the group’s first oil palm plantation foray into  Sarawak and would increase its total plantation land bank by 357% to 44,800 acres from 9,800 acres.

The group went on to say that in view of the land size of the prospective oil palm plantation, it would have to set up a palm oil mill to process its fresh fruit bunches at a later stage.

Astral shares closed one sen or 4.17% lower at 23 sen yesterday, giving the company a market capitalisation of RM151.8 million.

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