Oriental Unit Acquires 90 Pct Stake In PT Surya Agro For US$27.1 Mln

KUALA LUMPUR, March 3 (Bernama) -- OAM Asia (Singapore) Pte Ltd (OAMA) has acquired 90 per cent stake in PT Surya Agro Persada (SAP) for US$27.16 million (RM98.321 million), Oriental Holdings Bhd (OHB) said in a filing to Bursa Malaysia (Malaysia's Stock Exchange). This is following the confirmation obtained from the Indonesia's Law and Human Rights Ministry for the acquisition of the stake from PT Kencana Sawit Abadi which then holds the remaining 10 per cent. OHB said the purchase price would be financed by bank borrowings. OAMA is a wholly owned subsidiary of Oriental Boon Siew (Mauritius) Pte Ltd (OBSM) which in turn is a 50.5 per cent unit of OHB. OHB said the acquisition was consistent with its strategic plan to expand its planted land holding in Indonesia. "This expansion of upstream activities will enhance value chain and allows the group to derive synergies through enhanced operations and optimisation of costs across all its plantations through sharing of common resources and expertise," it said. "This, in turn, will help the group strengthens its position in the palm oil and agribusiness industry," it added. Besides plantation, OHB Group involves in automotive, hotels and resorts, plastic products, investment holding and financial services, investment properties and trading of building materials products, and healthcare. OHB said the palm oil industry is expected to have good upside potential as global demand for crude palm oil is anticipated to be strong in the long term. "The acquisition is important for the plantation development as it would enable the group to have its fourth crude palm oil mill in Indonesia and the first mill in South Sumatra. "It would also reinforce the group’s standing as a key plantation player in Indonesia," it said. OHB said the acquisition is expected to improve the future earnings of the group resulting from the cultivation and harvest of oil palm. "The board is confident that the acquisition will further enhance its plantation division’s contribution to OHB’s performance," it said. -- BERNAMA