Deal may hike cash level by K2.35bil

The National Business

By SHIRLEY MAULUDU
SIME Darby Plantation Bhd can bump up its cash reserve by about RM2.9 billion (K2.35bil) and substantially reduce its gearing level if it sells up to a 49 per cent stake in New Britain Palm Oil Ltd (NBPOL), New Straits Times reported yesterday.
Analysts said the group could also consider other options, such as relisting the Papua New Guinea unit.
Sime Darby Plantation has been reportedly considering selling a 25 to 49 per cent stake in NBPOL and has asked potential advisers for proposals on options for the unit.
Some analysts, however, feel the relisting plan may not be favourable, given the current soft crude palm oil (CPO) prices.
When The National contacted the company yesterday to confirm, response from corporate communications department was that Sime Darby Plantation Berhad’s priority was to create more value for its
shareholders from existing asset portfolio.
However, the focus of the company’s fice-year strategy blueprint post-pure play is on:

  • Strong operational excellence in our upstream business;
  • Serving our customers’ evolving needs in our downstream business; and,
  • Maximising returns across the palm oil value chain by leveraging on our integrated business model.

According to a previous report in The National on March 3, 2015, Sime Darby had completed the acquisition of NBPOL on March 2, 2015.
From the acquisition, NBPOL had added more than 135,000 hectares of land in PNG to Sime Darby’s total land bank of almost one million hectares that is spread out in five countries.
During the official announcement in Port Moresby then, it was revealed that NBPOL was a significant acquisition for Sime Darby.
The acquisition was worth about US$1.7 billion. (K5.47 billion).