Sime Darby Berhad via Kumpulan Sime Darby Berhad, an indirect wholly-owned subsidiary of the group has entered into a sale and purchase agreement with NS Corporation for the disposal of 1,382.2 acres of land located in the Malaysia Vision Valley area in Labu, Negeri Sembilan for a cash consideration of RM460 million.
This comes from earlier land disposal of 760 acres of land in MVV to Sime Darby Property Berhad, the proposed Disposal forms a continuation of the group’s ongoing strategy of monetising the lands in MVV, being one of the non-core assets
identified for divestment.
As part of the demerger exercise undertaken by Sime Darby in 2017, KSDB had entered into a sale and purchase agreement with Sime Darby Plantation Berhad to acquire 8,796 acres of the entire land in MVV, which was set off against part of the amount
SD Plantation owed to Sime Darby. In conjunction with the demerger exercise, KSDB also entered into 29 Call Option Agreements with SD Property which accord, amongst others, SD Property the rights of first refusal over the Land. SD Property had in March 2022, declined the offer to acquire the Land which is the subject matter of the Proposed Disposal.
The land is agricultural land with development potential that has been planned to be part of Malaysia Vision Valley 2.0 Pending the development of the land, SD Plantation manages oil palm estates on the land via a tenancy agreement with KSDB until 2023. Monthly rental income is calculated based on the preceding month’s average price of Crude Palm Oil per metric tonne for Malaysia and the total planted area. KSDB has the right to request SD Plantation to surrender any part of the tenanted land by giving SD Plantation a 6 months’ notice.
The original cost of investment of the Entire MVV Lands acquired under the demerger exercise was RM2.5 billion, of which RM394.9 million was the original cost apportioned to the Land.
The net book value of the Land in KSDB was RM395.9 million, which included the allocated original cost of investment and capitalised costs. The net book value of the Land in Sime Darby’s consolidated accounts was approximately RM1.3 million. The lower net book value in the consolidated accounts of Sime Darby is due to consolidation adjustments for intra-group transactions (which included the demerger restructuring).
