TDM Berhad and a minority shareholder have decided on the disposal of 100% equity interests of its palm oil plantation PT Rafi Kamajaya Abadi and PT Sawit Rezki Abad to Ikhasas Sawit Sdn Bhd for a total cash consideration of RM115 million.
The group currently owns 93.8% of RKA and 95.0% of SRA while the remainder of its holdings is under minority shareholders. Based in Indonesia, the plantations were established in 2007 and 2011 and while RKA has been loss-making since 2020, SRA has been losing money from its inception.
Excluding the portion attributed to the minority shareholder, TDM will raise gross proceeds of RM112 million from the proposed disposal, out of which RM74.2 million will be allocated for the repayment of interest-bearing borrowings and RM29.3 million for general working capital. The balance of RM8.5 million is earmarked for expenses in relation to the exercise. In the meantime, the management services arrangement would allow TDM to free a significant amount of cash flow that can be redirected into more productive activities that would otherwise be used to operate and maintain RKA.
Executive Director Haji Najman Kamaruddin added with the sale completed TDM would be able to focus its resources and attention on its Malaysian operations. Initiatives would include among others optimizing the outputs from TDM’s landbank in the East Coast area by diversifying into other crops besides the mainstay palm oil plantations and CPO production.
