TDM Bhd dispose Indonesian operations for RM 115 million

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TDM Bhd and a minority shareholder proposed disposing their whole equity stakes in PT Rafi Kamajaya Abadi (RKA) and PT Sawit Rezeki Abadi (SRA) to Ikhasas Sawit Sdn Bhd, a party nominated by Ikhasas CPO Sdn Bhd, for RM115 million.

The disposal consideration, according to a filing with Bursa Malaysia today, was determined using a “willing buyer-willing seller” basis, after taking into account, among other things, the value of the plantation assets owned by the disposal companies, the justification for and the effects of the proposed disposal, respectively.

Furthermore, the offer from Ikhasas CPO is the board’s sole offer for the disposal of both RKA and SRA once the TDM conducts another sale procedure in April 2021.

Based on the aforementioned, the board believes that the disposal consideration is appropriate.

“The proposed disposal will enable TDM and its subsidiaries to exit its Indonesian operations and focus its resources on its Malaysian operations.

“Furthermore, the proposed disposal is in line with TDM’s intention to dispose of the companies as determined by the board in April 2019,” it said in the filing.

TDM anticipates that the RM112 million in gross proceeds from the proposed disposal will enhance the group’s overall cash position and provide the requisite funds for the company to utilize for general working capital and the repayment of interest-bearing debt.

It further stated that because the proposed disposal does not entail the issuing of additional ordinary shares in the business, there would be no impact on the issued share capital of the company or the substantial shareholders’ shareholdings in the company.

“Barring any unforeseen circumstances and subject to the fulfilment of all the RKA conditions and SRA conditions, the SRA conditional sale and purchase agreement (CSPA) and RKA CSPA are expected to be completed by the third quarter of 2023 and first quarter of 2025 respectively,” it added.