TSH Resources Bhd announced the sale Oil palm plantation measuring 13,214 hectares of land together with uncertified land adjoing the plantation measuring 683.36 hectares in North Kalimantan for RM731.09 million.
The disposal of the land situated in Tanah Kumnning Village And Mangkupadi Village, East Tanjong Palas District, Bulungan Regency in North Kalimantan is to be made through TSH Resources’ 90% owned subsidiary Pt Bulungan Citra Agro Pesanda.
In a circular to its shareholders, it said that the proposed disposal enables the Group to raise cash proceeds amounting to approximately RM731.09 million for its partial repayment of interest-bearing borrowings.
In addition, it will amongst others, lower the Group’s gearing level from 0.68 times to 0.28 times and improve the ability of the Group to borrow further should new business opportunities arise; and improve the Group’s cash flow position due to lower interest expense.
Separately, part of the proceeds from the Proposed Disposal will be channelled towards the Group’s business operations as it will be utilised for new planting and replanting of oil palm as well as for infrastructure works and capital expenditure. The Group will be able to conserve its internally generated funds to strengthen its financial position.
