Boustead Plantations: KLK takeover still pending final decision between transacting parties

KUALA LUMPUR (Oct 3): The acquisition of a 33% stake in the Boustead Plantations Bhd by Kuala Lumpur Kepong Bhd (KLK) from the Armed Forces Fund Board (LTAT) “is pending a final decision between the transacting parties”, the two companies said, noting that the cut-off date for fulfilling the condition precedent is Friday (Oct 6).

Both Boustead Plantations and KLK had been queried by the stock exchange to confirm or deny whether the acquisition had fallen through after The Edge, citing anonymous sources, reported that KLK’s RM1.15 billion acquisition of the 33% stake had been scrapped after two deadline extensions for the cut-off date, first from Sept 11 to Sept 22, and later to Oct 6.

"The proposed strategic collaboration is pending a final decision between the transacting parties; and the cut-off Date for fulfilling the condition precedent is on Oct 6, 2023," the two companies said in their separate filings.

KLK also clarified that it "had no advance notice of, and there was no confirmation of the government’s intention" to "help LTAT avoid losses", as reportedly said by Prime Minister Datuk Seri Anwar Ibrahim on Monday (Oct 2).

Anwar on Monday reportedly said that the Ministry of Finance has allocated RM300 million this week to help LTAT address its liquidity issues, and is looking for a total of RM2 billion by year end to "save" LTAT.

The money would help LTAT avoid losses, Anwar was quoted as saying in news reports, as he revealed the financial support at the launch of the Felda Segalanya event at Felda Chemomoi, Teriang, Pahang.

The BPlant-KLK proposal came just months after LTAT took Boustead Holdings Bhd -- also a shareholder of Boustead Plantations -- private to accelerate the latter’s debt restructuring. The sale of Boustead Plantations is also seen as necessary to increase the assets liquidy of LTAT, which stood at around 20%, minister of defence Datuk Seri Mohamad Hasan told the Dewan Rakyat in September.

Shares of both Boustead Plantation and KLK had been voluntarily suspended for trading on Tuesday prior to the filing. The shares will continue to be suspended from Wednesday "pending an announcement", the companies said separately.

KLK had in August proposed to acquire 739.2 million shares, equivalent to 33% plus one share in Boustead Plantations at RM1.55 per share.

As at Sept 29, KLK had accumulated 69.29 million shares or a 3% stake in Boustead Plantations from the open market.

Shares of Boustead Plantations last closed at RM1.27 prior to its suspension, down 16% from a high of RM1.52 on Aug 28 after gaining substantially following KLK’s proposed acquisition.

Read also:
Trading of BPlant, KLK securities halted pending announcement