KUALA LUMPUR (April 14): Sime Darby Plantation Bhd (SDP) is disposing of two of its indirect subsidiaries in Indonesia for a total cash consideration of 1.75 trillion Indonesia rupiah (RM518 million).

The two oil palm plantation firms — PT Ladangrumpun Suburabadi and PT Sajang Heulang — are owned by SDP units PT Anugerah Sumbermakmur (ASM) and Minamas Gemilang (MGG).

ASM and MCG have agreed to sell the two firms to PT Global Berkat Usahatama (GBU), said SDP in a bourse filing on Friday (April 14).

SDP said the disposal of the two firms would allow ASM and MGG to focus on their core business operations.

Besides, this also marks the full and final settlement of a RM1.72 billion lawsuit initiated by Asa Karya Multi Prama (AKMP) against SDP and four of its subsidiaries, namely ASM, MCG, Guthrie International Investments (L) Ltd and Mulligan International BV.

AKMP resorted to court action because it had wanted to acquire the two plantation firms (Ladangrumpun Suburabadi and Sajang Heulang) for RM483 million. However, it alleged that SDP had snubbed the deal and "unlawfully offered" shares in the two firms to a third party.

AKMP has now appointed GBU to proceed with the purchase of the two plantation firms, according to SDP.

SDP said the group's total cost investment for the two plantation firms was RM17.05 million, and it expects to record a net gain of RM107 million from the disposal. This translates into a gain per share of 1.5 sen in the financial year ending Dec 31, 2023.

The proceeds of the disposal will be utilised for its working capital, said SDP, adding that the exercise is slated to be completed by the fourth quarter of this year.

SDP’s share price closed five sen or 1.16% lower at RM4.27, giving the group a market capitalisation of RM29.53 billion.