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Gunaria Sdn Bhd, a wholly-owned subsidiary of
the Company, has on 4 April 2007 entered into a Conditional Sale and
Purchase Agreement ("CSPA") to acquire 2,850 shares of Rp.1,000,000 each (or
95% equity interest) in PT Zarhasih Kaltim Perkasa ("ZKP") for a total cash
consideration of Rp.2,850,000,000 (approximately RM1,056,000) ("the Proposed
Acquisition").
ZKP was incorporated on 30 March 2005 in Indonesia. ZKP intends to cultivate
oil palm on a plot of land measuring approximately 10,000 hectares located
in Sangatta, Kutai Timur, East Kalimantan ("the Land") for which it has
successfully obtained the plantation permit (Izin Usaha Perkebunan). ZKP
will pursue further with the relevant authorities in Indonesia until the
lease title (Sertifikat Hak Guna Usaha) is obtained and the oil palm
plantation is established. The Land cost is anticipated approximately USD347
(about RM1,200) per hectare.
The conditions precedent to the CSPA include the following:-
| (a) |
completion of
the due diligence; and |
| (b) |
approval of
Indonesian Investment Coordinating Board for the change in shareholding
and conversion of ZKP to a foreign capital investment company. |
The Proposed Acquisition is part of the long term business strategy of the
Company to expand its oil palm operations. The Land is strategically located
and fits with its plan of enhancing its existing infrastructure in Sabah.
None of the Directors nor substantial shareholders of the Company, or
persons connected with them, has any interest, direct or indirect, in the
Proposed Acquisition and no approval of shareholders is required. The
Proposed Acquisition is not expected to have any significant effect on the
earnings or net assets per share of the Company for the financial year
ending 31 March 2008.
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