Pinehill RM413.57m plantation asset disposal fair and reasonable, BDO says

TheEdge Thu, Dec 27, 2018 04:13pm - 5 years View Original


KUALA LUMPUR (Dec 27): Pinehill Pacific Bhd's proposed disposal of its plantation assets comprising about 3,599.65 ha (8,999.13 acres) of land in Perak's Hilir Perak district to United Plantations Bhd for RM413.57 million is fair and reasonable based on factors including the assets' fair value and rationale for the disposal, independent adviser BDO Capital Consultants Sdn Bhd said.

BDO said today in its independent advice letter to Pinehill shareholders that the disposal is fair because the sale consideration of RM413.57 million is an RM83.07 million or 25.1% premium against the market value of the assets at RM330.5 million.

Against the assets' aggregate net book value (NBV), the disposal consideration of RM413.57 million represents a RM141.96 million or 52.3% premium over the NBV, according to BDO.

BDO said the disposal is reasonable based on factors including the rationale of the exercise. BDO said it noted the Pinehill board's view that the exercise is an opportunity for the group to unlock the value of its investments.

BDO said it also noted Pinehill's plan to use the disposal proceeds to repay bank borrowings and finance the development of Pinehill's remaining plantation land in Indonesia.

"Based on the above, BDO views that the proposed disposal is fair and reasonable insofar as the shareholders of Pinehill are concerned. Accordingly, we advise and recommend that the shareholders vote in favour of the special resolutions pertaining to the proposed disposal to be tabled at the forthcoming EGM (extraordinary general meeting)," BDO said.

According to Pinehill's circular to shareholders, the EGM will be held at Grand Court Hotel in Teluk Intan, Perak on Jan 18, 2019 at 2pm.

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