Posted by Jimmy Song > 2013-10-01 08:17 | Report Abuse

KUCHING, SARAWAK, 30 SEPTEMBER 2013 – Sarawak Timber Industry Development Corporation (“STIDC”) has today signed the Reorganisation & Rationalisation (“R&R”) Agreement with PUSAKA Capital Sdn Bhd (“PUSAKA Capital”), a special purpose vehicle, incorporated by STIDC to spear head the initiative to reorganise and rationalise the Group (“Proposed R&R Exercise”). This governance structure (see Appendix A) which led to the implementation of the Proposed R&R Exercise was recently approved by the Board of STIDC, led by YB Datuk Amar Haji Awang Tengah Ali Hasan, Chairman of STIDC and Minister in charge of STIDC in Sarawak. The Proposed R&R Exercise clearly segregates STIDC’s regulatory function for timber industry from its other roles. The more focus role allows STIDC to spear head the transformation journey in the advancement of innovative timber industry which requires a lot of financial resources in delivering a more effective facilitation role and provision of comprehensive supporting eco-system. On the other hand, the commercial functions would help generate more diversified sources of revenue to sustain its regulatory role, minimizing the need to depend on government funding and promote financial self-sustainability. As part of the Proposed R&R Exercise, STIDC will transfer real properties with land areas of approximately 1,280 hectares in Tanjung Manis and several of its key operating companies, such as Tanjung Manis Integrated Port Sdn Bhd, Tanjung Manis Development Sdn Bhd etc to PUSAKA Capital which will be satisfied via the issuance of new PUSAKA Capital ordinary shares together with warrants. In addition, STIDC will subscribe up to RM100 million investment instruments which carry coupon of 4% to be issued by PUSAKA Capital. The identified projects for PUSAKA Capital, which range from the development of Palm Oil Industry Cluster (“POIC”) and related ports and logistic infrastructure investment such as the Independent Operating Terminals as well as the establishment of new Administrative Centres and Townships for Tanjung Manis and various timber related initiatives within the State of Sarawak etc, are estimated to generate an estimated project values of at least RM3.8 billion and will contribute significant economic impacts to Sarawak and the Sarawak Corridor of Renewable Energy (“SCORE”) region. Tanjung Manis is one of the key identified areas for the southern SCORE region of Sarawak. The Chairman of STIDC, YB Datuk Amar Haji Awang Tengah Ali Hasan, said, “The Proposed R&R Exercise is an important milestone for STIDC as it serves to institutionalise the various investments and business opportunities of STIDC and its group of companies in order to have a clearer segregation of regulatory functions of STIDC from its commercial arms to operate various commercial related projects as well as to segregate risks and required returns on various investments made within the STIDC Group.” Within the PUSAKA Capital, four (4) wholly-owned subsidiaries have been set up (Appendix B) to serve the four targeted business segments as follows:- - PUSAKA Palm Oil Industry Sdn Bhd - PUSAKA Logistics & Services Sdn Bhd - PUSAKA Realty & Construction Sdn Bhd - PUSAKA Timber Industries Sdn Bhd The Chairman added “With the establishment of PUSAKA Capital, it will transform STIDC Group from a Statutory Body mandated to develop the timber industry in Sarawak into a more diversified group via its commercially operated arms ie: PUSAKA Capital, to further complement and diversify the earnings platform for STIDC and hereby establish a sustainable and long term business model for STIDC Group.” Datu Haji Sarudu Bin Haji Hoklai, the General Manager of STIDC further added that I am very delighted that STIDC have finally taken the necessary steps to implement the Proposed R&R Exercise which is expected to be completed by end of this year”. He further added that, “As there will be four (4) subsidiaries with different unit functions, it will enable the Group to have a clearer direction going forward. The clear segregation of functions would enable each core segment to increase their overall value contribution, and for PUSAKA Capital to capture avenues of new growth for the STIDC Group.” This Proposed R&R Exercise will provide PUSAKA Capital with a strong business structure and offer the Group with better access to larger scale business opportunities and funding commitments required to meet the projects identified by PUSAKA Capital. As such, with the completion of the Proposed R&R Exercise, PUSAKA Capital will be financially and operationally prepared for mega projects in the region going forward. “Most importantly, with this Proposed R&R Exercise, we are also proud to be able to give all the staff in STIDC with the right knowledge, skill and experience and further opportunities for career enhancement in PUSAKA Capital Group,” added by the Chairman. Astramina Advisory Sdn Bhd is the appointed Independent Financial Adviser.