WTK Holdings has informed its shareholders of the proposed 70% equity acquisition of Durafarm for a total cash consideration of RM132,200,000 subject to the terms and conditions of the SSA.
The sizeable land banks held by Durafarm of approximately 5,040.97 hectares in Sarawak with a total planted area of approximately 4,010.57 hectares and age profile of the oil palms trees planted thereon, whereby approximately 66.80% of the planted area consists of immature oil palms and approximately 14.57% of the planted area consists of young mature oil palms.
As the oil palms mature and move into higher yielding age bracket, Durafarm’s oil palm yields are poised to improve further and the growth momentum in Durafarm’s revenue and earnings is expected to continue in the future financial years. There is an additional land area under the Plantation Estate measuring approximately 867.31 hectares which is currently under
development and being earmarked for replanting by the end of 2023.
Upon acquiring, the group’s oil palm planted area will increase from 16,428.50 hectares to 20,439.07 hectares; as the land area measuring 867.31 hectares of the Plantation Estate is under development for replanting of new oil palm trees.
WTK sees the proposed acquisition as representing a strategic investment by the Group, noting the scarcity of suitable and sizeable land banks for oil palm cultivation in Sarawak which are available for acquisitions due to the ban of new development of oil palm estates in Sarawak by the Sarawak State Government under its policies concerning deforestation and peatland protection
Durafarm is a private limited company engaged in the business of planting and management of an oil palm plantation in Betong and Sri Aman, Sarawak with the principal market for the sale of FFB solely in the Sarawak region. MSPO certification has been awarded in respect of the Plantation Estate on 19 March.