TH Plantations taken to court over discontinuance of plantation units’ sale

TheEdge Tue, Mar 30, 2021 11:24pm - 2 years View Original


KUALA LUMPUR (March 30): TH Plantations Bhd is facing  a lawsuit over its decision not to proceed with its proposed disposal of two plantation units to Sabah-based private firm Tamaco Plantation Sdn Bhd for RM170 million.

Tamaco has filed the suit to get TH Plantation to complete the sale of Bumi Suria Ventures Sdn Bhd and Maju Warisanmas Sdn Bhd, TH Plantations said in a filing with Bursa Malaysia.

The highly-publicised proposal failed to materialise after the Economic Planning Unit (EPU) withdrew its approval for the transaction on Dec 4, 2020 – 10 days after the initial approval was given, said TH Plantations.

The transaction needed the approval of the EPU, as Tamaco is a non-Bumiputera company.

Following the EPU's decision, TH Plantations said it decided not to extend the long stop date for the proposed sale as requested by Tamaco.

In its suit, Tamac is seeking a declaration that the firm and TH Plantations are entitled to continue with the sale and purchase agreement, and that TH Plantations “was stopped by its own conduct” to terminate the SPA.

Tamaco is also seeking a permanent injunction against TH Plantations to prohibit the latter from terminating the SPA, and it is also seeking damages.

The proposed sale of Bumi Suria Ventures and its subsidiary Maju Warisanmas entered the spotlight in July last year, when the new government put the transaction under review.

Government MPs at the time questioned the proposed transaction price, which was lower than the market valuation by independent valuers.

The two target companies collectively own 6,513ha of oil palm plantations in Bintulu and Sibu, Sarawak

TH Plantations acquired the two companies in 2012 for RM212.5 million and RM42.08 million respectively. In 2018, Bumi Suria Ventures booked an impairment of RM244.07 million.

Shares of TH Plantations closed unchanged at 49.5 sen today, valuing the group at RM437.51 million.

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