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Sime not buying NBPOL

This is written by my colleague Cheryl Achu.

KUALA LUMPUR: Sime Darby has aborted its plan to buy Kulim (M) Bhd’s 49 per cent stake in London-listed New Britain Palm Oil Ltd (NBPOL).

Sime Darby, which was chosen as the preferred bidder for the stake in July, had a 60-day exclusivity period that ended two days ago on the acquisition but decided not to go ahead with it.

Its decision has now paved the way for previous suitors, which reportedly included Felda Global Ventures Holdings Bhd (FGV) and a consortium comprising the Sultan of Johor and a Singapore-listed China entity, to put in a new bid for NBPOL.

“We have decided not to proceed further at this time on the proposed acquisition of Kulim’s stake in NBPOL,” Sime Darby said in a filing to Bursa Malaysia yesterday, without revealing the reason for the withdrawal.

Kulim, NBPOL’s single-largest shareholder, wants to sell its stake as it is unable to exert management control over the plantation group that is a source of significant employment in Papua New Guinea (PNG).

NBPOL, which is listed on the London Stock Exchange, has a market capitalisation of £750 million (RM4 billion) and is managed by a group of professional managers who own a 4.49 per cent stake via Pacific Rim Plantations Services Pte Ltd, PNG’s West New Britain provincial government has an eight per cent stake.

NBPOL, which produces palm oil exclusively in PNG and the Solomon Islands, has 77,000ha of oil palm plantation, 12 palm oil mills and one refinery each in PNG and the United Kingdom.

The group is also PNG’s largest sugar and beef producer via its more than 7,718ha of sugar cane plantations and 9,282ha of grazing pastures.

Besides Sime Darby, FGV were among the shortlisted companies for Kulim’s stake, which is up for sale after Kulim failed to raise its stake from 49 per cent to 69 per cent in July 2013. Kulim first acquired interest in NBPOL in 1996.

Landing NBPOL stake would help FGV attain its 2020 targets, namely to achieve 8.7 million tonnes crude palm oil (CPO) production as well as a plantation landbank to 925,000ha.

Several others then entered the fray, including two plantation groups from Indonesia, Singapore’s Wilmar International Ltd and plantation giants IOI Corp Bhd and Kuala Lumpur Kepong Bhd.

Yesterday, Sime Darby share price fell three sen to close at RM9.15 on Bursa Malaysia.

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