IJM accepts KLK's offer for plantation business, expects RM700m disposal gain
KUALA LUMPUR (June 11): IJM Corp Bhd has agreed to sell its entire 56.2% stake in subsidiary IJM Plantation to Kuala Lumpur Kepong Bhd for RM1.53 billion cash, or RM3.10 per share. The disposal is expected to reap the group a disposal gain of RM700 million, IJM said in a statement today.
On completion of the transaction – which is still subject to approval of shareholders and lenders at an extraordinary general meeting to be convened at a date that has yet to be determined – IJM Plantation will cease to be its subsidiary. But IJM will continue to be entitled to the dividend of 10 sen per share in July that was declared by IJM Plantations.
IJM believes the proposed disposal is in the best interest of the group, given the attractive offer price and the maturity of the plantation business, which it currently has no plans to expand further. “The recent strong CPO (crude palm oil) price environment and good showing by plantation companies have presented an opportune window for IJM to dispose of its plantation business at an acceptable price,” said IJM chief executive officer cum managing director Liew Hau Seng.
The proposed disposal allows IJM to realise its investment in IJM Plantations, which has been underappreciated by the market, partly due to the non-liquidity of the stock, IJM said.
“With the top 30 shareholders of IJM Plantations owning over 91% of the company, the stock is tightly held. Monetising its stake in IJM Plantations would be an effective way for IJM to realise the value of IJM Plantations, and in doing so, benefit all existing shareholders of the latter. At the offer price of RM3.10, the market capitalisation of IJM Plantations is RM2.73 billion.
"The proposed disposal will also enable the group to streamline its businesses to focus on construction, property development, infrastructure concessions and the manufacturing of building materials, all of which derive synergistic benefits with one another, thereby reducing the conglomerate discount currently ascribed to IJM’s market valuation," the group said.
"Going forward, the absence of the plantation business is also expected to reduce the group’s earnings volatility from fluctuating crude palm oil prices and foreign exchange rates arising from the foreign currency denominated borrowings of IJM Plantations," it added.
Net proceeds from the proposed disposal would strengthen IJM’s balance sheet and see its net gearing decrease from 44% to 21.6%. "This would enable the group to pursue new opportunities that may arise, fund existing working capital or capital expenditure requirements and reward shareholders by way of a special dividend or pursue share buyback activities. IJM has, in the past, declared special dividends when it successfully monetised its assets," IJM added.
For its financial year ended March 31 2021, IJM Plantations registered its highest ever revenue of RM935.69 million and profit of RM205.08 million since its inception in 1985. IJM Plantations has a planted area of 25,014 ha in Sabah and 36,263 ha in Indonesia, with the average age profile of its trees standing at 14 years and eight years in the respective locations.
Going forward, Liew said IJM is on firm footing, as the group pursues its next growth trajectory.
“We have been working hard to grow shareholder value, which includes adopting a more proactive stance on capital management. The significant gain from the proposed disposal of IJM Plantations is expected to reduce the steep discount to IJM’s share price and highlights sizable value-unlocking potential, given our attractive portfolio of assets,” he added.
IJM and KLK will enter into a share sale and purchase agreement for the transaction. On execution of the agreement, KLK will be obliged to extend a mandatory general offer for the remaining IJM Plantation shares it does not own.
IJM shares closed two sen or 1.03% lower today, after 9.26 million shares were traded. IJM Plantations settled unchanged at RM3.06, for a market capitalization of RM2.7 billion. There were 4.7 million shares traded.
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The New Straits Times , Malaysia
KL Kepong offers RM1.53bil to buy 56.6pct of IJM Plantations
KUALA LUMPUR: IJM Corp Bhd has received an offer from Kuala Lumpur Kepong Bhd (KLK) to buy 494.86 million shares representing a 56.2 per cent stake in IJM Plantations Bhd for RM1.53 billion
In an exchange filing today, IJM said its board of directors had received a letter from KLK to buy the shares at RM3.10 each.
"After having deliberated on the merits of the offer, the board is in principle agreeable to finalise the terms and conditions with KLK to meet the timing specified in the offer letter for the execution of the sale and purchase agreement on or before 5pm on June 11 2021," said IJM.
In a letter offered by KLK, the plantation company confirmed that it had the financial resources to complete the proposed acquisition.
Wed, 5 May 2021, 2:19 PM
And then KLK took over offer at Rm3.10 on
One month later on June 9th KLK offered to take over Ijmplant from Ijm Corp for Rm3.20 (3.10 & 10 sen dividend) for a gain of Rm1.34 or 72% profit
See
| IJM CORPORATION BERHAD |
| Type | Announcement |
| Subject | OTHERS |
| Description |
RECEIPT OF AN OFFER FROM KUALA LUMPUR KEPONG BERHAD ("KLK") FOR A PROPOSED ACQUISITION BY KLK OF THE ENTIRE EQUITY STAKE HELD BY IJM IN IJM PLANTATION BERHAD (IJMP)
|
|
The Board of Directors of IJM ("Board") has on 9 June 2021 received a letter dated the same day ("Offer Letter") from KLK proposing to acquire 494,865,786 ordinary shares in IJMP (“Sale Shares”) representing approximately 56.20% equity stake held by IJM in IJMP ("Offer"). In the Offer, KLK wishes to acquire the Sale Shares for a total consideration of approximately RM1,534,083,936 (based on RM3.10 per Sale Share) to be payable in cash (“Purchase Price”), subject to the terms and conditions of a sale and purchase agreement to be executed (“Proposed Acquisition”). Save for the RM0.10 per share interim dividend declared by IJMP on 27 May 2021 which will be due and payable to IJM on 30 July 2021, any subsequent declaration by IJMP of dividends and/or other distributions (“Distributions”) on or after the date of the Offer Letter, but prior to the completion of the Proposed Acquisition and of which IJM is entitled to retain such Distributions, the Purchase Price will be reduced by the quantum of the Distributions which IJM is entitled to retain. |
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Why is KLK willing to take over IJMPLANT at Rm3.10?
The answer is KLK knows from past palm oil bull run when CPO crossed RM4,000.00 a ton
IJMPLNT share price has great potential to be above Rm4.00 a share
==============================
Summary of IJMPLANT previous price records
YEAR...LOWEST PRICE...HIGHEST PRICE
2004..Rm1.00........RM1.40
2005...0.91...........RM1.20
2006..Rm1.02........RM1.66
2007..Rm1.36........RM3.25
2008..Rm1.19........RM4.01
2009..Rm1.81........RM2.89
2010..Rm2.36........RM3.14
2011..Rm2.38........RM3.24
2012..Rm2.63........RM3.77
2013..Rm2.75........RM3.62
2014,,Rm3.11........RM4.03
As you can see both in Years 2008 & 2014 IJMPLANT CROSSED THE RM4.00 THRESHOLD
NOW JUST AS IJMPLANT CROSSED RM4.00 IN THE PREVIOUS GOOD YEARS,
TSH RESOURCES SHARE PRICE ALSO PERFORMED AND CROSSED RM4.00
JUST LIKE IJMPLANT PERFORMED TOO.
PLEASE NOTE :
SUMMARY
TSH RESOURCES previous price records
YEAR....LOWEST PRICE...HIGHEST PRICE
2004.....0.45................. RM1.01
2005....0.63.................. RM1.05
2006....0.60.................. RM1.05
2007....0.77.................. RM1.65
2008....0.55.................. RM1.94
2009....0.66..................
2010....0.84..................
2011....1.33..................
2012....1.87..................
2013....2.05..................
2014....2.72..................
In the same year 2014 when IJMPLANT was Rm4.03 ;
TSH RESOURCES SHARE PRICE ALSO REACHED RM4.00
BOTH ARE REAL HAPPENINGS , A REMARKABLE CONCURRENCE OF EVENTS !
THERE IS A HIGH POSSIBILITY TSH RESOURCES WILL REACH RM2.00 IN COMING DAYS
PALM OIL PRICES ARE ON THE UPTREND BULL RUN & CREATING NEW HIGHER PRICES.
| Month | Price | Change |
|---|---|---|
| Jan 2021 | 3,997.72 | - |
| Feb 2021 | 4,126.35 | 3.22 % |
| Mar 2021 | 4,234.71 | 2.63 % |
| Apr 2021 | 4,446.03 | 4.99 % |
| May 2021 | 4,765.75 | 7.19 % |
==============================
WHY RM2.00 TARGET PRICE FOR TSH RESOURCES?
FOR 3 MAIN IMPORTANT REASONS
REASON : NUMBER ONE
TSH / 9059
SEE_Research
TSH RESOURCES/ 9059
The top management , main director accumulating with strong number of shares recently
Tan Aik Pen , recent bought more than " many TSH shares , "
sub total : 12,950 lots ( 1 lot = 1,000 shares )
sub total : 12,950 lots x average price RM 1.08 almost RM 14 millions
Pls note : after Kelvin Tan Aik Pen on his massive strong buys ,
EPF from seller ( 3 , 8 June 2021 ) turns buyer on 23 July 2021. Remarks This clearly demonstrates how the institutional funds , including the national fund behaves , strangely , it m
The Group primarily operates in the cultivation, processing and refining of oil palm.
TSH Resources Berhad (Company No. 49548-D) (TSH) has had a modest start in the plantation industry where it all began in Sabah, Malaysia. We are growing from strength to strength as we aggressively expand and grow our plantations by acquiring land in the Indonesian region.
TSH has over the years developed a strong platform to spur growth— increasing its land bank, leveraging on advanced oil palm tissue culture technology and developing its people with the set up of its plantation training centre.
TSH believes that these strategic components will set the stage for sustainable growth in the coming years while ensuring that it stays competitive as an aspiring regional plantation player.
Latest Highlights:
HIGHEST PROFIT GROWTH COMPANY
Highest Compound Growth in PBT
&
BEST PERFORMING STOCK
Highest Returns to Shareholders
Know more about TSH by watching this video
Plantation
Our Plantation Locations
TSH Resources has several plantations and mills across Sabah, East Malaysia as well as parts of Sumatera and Kalimantan, Indonesia.
With its humble beginnings in Sabah, TSH has built up its plantation footprint and activity with aggressive expansion of its land bank in the region. Our plantations including associated companies are strategically located with approximately 50,000ha in planted areas across Sabah as well as parts of Kalimantan and Sumatra, Indonesia. Our unplanted land bank of about 65,000ha will keep us busy for many years to come and we are always on the lookout for more strategic acquisitions as part of our expansion plans. We are also confident that the young maturity profile of our palms in Indonesia is indicative of our positive growth prospects. TSH has also targeted new plantings of 4,000-5,000ha per year, allowing sustainable growth to the Group.
Tissue culture technology has contributed significantly to the development and productivity of oil palm. In keeping with the industry and the advancements in technology today, TSH has invested considerably in our research and development efforts for many years. We have now commenced commercial production of our Wakuba ramets and have started to plant these on our plantations in Indonesia. This is an important milestone for TSH as we achieve better yields and returns from our plantations that will accelerate growth objectives.
TSH was awarded a 100-year concession to carry out forest rehabilitation, environmental conservation and industrial tree planting on 123,000ha of forest land in Ulu Tungud, Sabah. We have also started to diversify and plant rubber as we believe that the addition of rubber is a good combination and spread of our plantation activities. TSH will continue to plant rubber by 1000-1500ha in the next few years, eventually building up to 10,000ha of planted rubber in order to capture the exciting potential of the rubber sector as well as increase our plantation footprint.
As we grow, so do our people. TSH is a firm believer that people are an important and integral component in sustaining our business in the long term. As a result, our Plantation Training Centre was established in 2005 in Central Kalimantan complete with facilities. The centre has successfully churned out a large number of students, all of whom have started out on their rewarding careers on our plantations. The pool of talents form a strong platform that enable TSH to implement its expansion plan.
“TSH is also increasing its milling capacity in Indonesia to support its upstream activity. Moving down mid-stream, TSH has a 50-50 joint venture refinery with Wilmar International Ltd in Sabah with a capacity of up to 800,000mt per annum.”
Going forward, our plantations are expected to be the main driving force of TSH, forming almost the entire Group’s earnings in 2011. With over 70% in young and immature hectarage, we can expect a rich harvest in the next several years. This will also translate to more resilient earnings with steady Fresh Fruit Production (FFB) growth. Ultimately, TSH hopes to realize its objective of becoming a significant regional plantation player via its quest to expand its land banks and planted areas.
Please view on 2 video clips --- TSH showing the company practises sound, sustainable cultivation methods ;
