Boustead Prepares For Plantation IPO
PETALING JAYA, April 7, 2014 – Boustead Holdings Berhad (Boustead Group) today announced its ultimate intention to list an enlarged Boustead Plantations Berhad (BPB) on Bursa Malaysia via the consolidation of its plantation assets in an exercise aimed at unlocking value. The Group’s plantation business is currently undertaken via its wholly-owned subsidiary, BPB and its 53.6% owned Al-Hadharah Boustead REIT (Boustead REIT)..
In order for the corporate exercise to commence, the Boustead Group via BPB will be undertaking the proposed privatisation of Boustead REIT.
The proposed privatisation is expected to be a landmark transaction for Malaysia’s capital market given that it will be the maiden privatisation of a real estate investment trust. The privatisation will be undertaken via a proposed selective unit redemption and repayment exercise (Proposed SUR) which involves the redemption of all the units in Boustead REIT held by the unit holders (except for the units held by BPB) and the corresponding cash repayment to unit holders.
The unit holders except for BPB will be offered a cash repayment and a special dividend amounting to a total of RM2.10 per unit. This represents an attractive premium of 16.7% over the net asset value of Boustead REIT as at 31 March 2013 of RM1.80 per unit, or a premium of 13.5% above Boustead REIT’s five-day volume weighted average price of RM1.85 as at 12 July 2013, being the last trading day of Boustead REIT’s units prior to the suspension.
Subsequently, Boustead REIT will be converted from a collective investment scheme to a private property trust with BPB as the sole beneficiary. The Proposed SUR is subject to regulatory approvals and Boustead REIT’s unit holder approval at an extraordinary general meeting to be convened.
YBhg Tan Sri Dato’ Seri Lodin Wok Kamaruddin, Deputy Chairman/Group Managing Director, Boustead Holdings Berhad said, “Timing is of the essence in business which is something the Boustead Group has always been cognisant of. This corporate exercise that we are proposing is undertaken at the right time and for the right reasons. After all, when Boustead REIT was listed in 2007, the timing was right with CPO price at a high for that period, in tandem with the bullish trend of other edible oils such as soybean oil.”
Added YBhg Tan Sri Dato’ Seri Lodin, “Today we are faced with a shortage of mature plantation land with prime yielding trees, and current market prices for such assets are high which gives rise to the challenge of sustaining the expected yield for a REIT. This is supplemented with the high dividend distribution made by Boustead REIT which does not allow us to retain sufficient internal funds to engage in growth strategies. Indeed, these factors provide us with a timely justification to undertake this privatisation exercise.”
“In fact, we are pleased to learn from our adviser, AFFIN Investment Bank that the Proposed SUR marks another milestone for Malaysia’s capital market as it is a mode of privatisation which is unprecedented in Malaysia. Credit is due to the foresight of and dynamic regulatory framework established by the Securities Commission Malaysia and Bursa Malaysia, without which the Proposed SUR could not materialise.”
“We intend to consolidate our plantation assets under BPB whilst achieving economies of scale and business synergies in our operations. This corporate exercise will allow the long-term unit holders of Boustead REIT, especially minorities, the opportunity to realise their investments at an attractive premium.” concluded YBhg Tan Sri Dato’ Seri Lodin.
Boustead REIT is the first and only Islamic plantation REIT in Malaysia. It was listed on the Main Market of Bursa Malaysia, on February 8, 2007. Since then, Boustead REIT has grown its plantation asset value to RM1.3 billion through a combination of the appreciation in the market value of its assets as well as acquisitions. To date, Boustead REIT has 12 oil palm plantations and three palm oil mills which are located in Peninsular Malaysia except for the Sutera Estate which is located in Sabah. The current market capitalisation of Boustead REIT is approximately RM1.2 billion.
Since its inception as a modest trading entity more than 180 years ago, the Boustead Group has grown by leaps and bounds to comprise more than 90 subsidiary and associate companies, and has substantial interests in various sectors of the Malaysian economy. The Boustead Group's operations are focused in six key areas; plantation, heavy industries, property, finance & investment, trading & industrial and pharmaceutical. As at 31 March 2013, Boustead Holdings Berhad’s paid-up capital was RM517.1 million while its shareholders’ funds stood at RM4.7 billion. Its current market capitalisation is approximately RM5.4 billion.
Forward looking statements
This release may contain certain forward-looking statements with respect to the financial conditions, results of operations and business of the Group and certain plans and objectives of Boustead Holdings Berhad with respect to these items. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future and there are many factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements.
on behalf of: Boustead Plantations Berhad
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