Greenyield secures shareholders’ approval to buy asset in PNG
KUALA LUMPUR: Greenyield Bhd has obtained approval from its shareholders at an EGM to acquire a 65% equity interest in Greenyield Rubber Holdings (M) Ltd (GRHM) for RM87.8mil.
In a statement, the horticultural specialist said GRHM is an investment holding company and serves as an agent to market and sell rubber and rubber wood, while its subsidiaries are principally involved in the extraction, processing, and supply of rubber as well as agriculture.
It owns 15,313 hectares of plantation properties in Papua New Guinea (PNG) comprising, inter alia, 6,450 Ha plantable area for rubber (of which 3,513 Ha are planted), and 3,613 Ha plantable area for coconut.
Executive director Tham Kin-On said: “We are certainly delighted to have received the green light from our shareholders for the proposed acquisition and the group is now one step closer to owning 15,313 Ha of plantation land in PNG.”
“We believe the timing is opportune as the target asset has turned profitable, and we can ride on the uptrend in demand growth for rubber and coconut going forward.,
“More importantly, we are pleased that our shareholders share the same sentiments with us and understand the potential and benefits arising from this exercise,” he added.
Tham said the proposed acquisition would enhance its earnings stream and provide the group with greater source of recurring income, which would be further enriched with crop diversification to include coconut trees.
“At the same time, Greenyield can extend the use of its plantation products and technology to boost productivity. The group targets to plant and replant up to 500 Ha and 300 Ha of rubber and coconut trees respectively every year,” he added.
Greenyield said the exercise is expected to be completed by the third quarter of 2022 barring any unforeseen circumstances, and subject to all requisite approvals being obtained.
The proposed acquisition is deemed a related party transaction given the common interests of certain directors and major shareholders in both the target asset and Greenyield.
Accordingly, the interested directors and major shareholders had abstained from voting and the resolution was passed by the non-interested shareholders of Greenyield.