KUALA LUMPUR (March 10): Genting Plantations Bhd’s indirect subsidiary, Genting MusimMas Refinery Sdn Bhd (GMMR), is entering a RM400 million recurrent related party transaction (RRPT) to sell its palm oil products to Inter-Continental Oils and Fats Pte Ltd (ICOP).

Singapore-based ICOP would either buy the products directly or act as a marketing agent for GMMR, which has just commenced commercial production, Genting Plantations said in an announcement on Bursa Malaysia today.

Both parties are related via Musim Mas Holdings Pte Ltd, which has full ownership in ICOP and GMMR’s 28% shareholder, Musim Mas International (South Asia) Ptd Ltd. Meanwhile, Genting Plantations holds the remaining 72% stake in GMMR.

According to the group, the transactions will enable GMMR to establish its foothold in the refined palm oil products market under ICOF, which is the marketing arm of Musim Mas and its subsidiaries.

Musim Mas, which is among the top five traders in palm oil globally, has an operational presence in 13 countries around the world and sells its products to over 80 countries.

The transaction value of RM400 million is for the period between March 10 and May 31 this year, with any subsequent RRPTs subject to shareholders’ mandate at the Genting Plantations’ forthcoming annual general meeting (AGM), the group said.

Transaction prices will be benchmarked against prevailing market prices in order to ensure that the RRPTs are not based on terms more favourable to the parties than they are to the public, or detrimental to minority shareholders, Genting Plantations added.

The transactions, it said, will not have any effect on the share capital and shareholdings of major shareholders, nor are they expected to affect the group’s earnings or net assets.

Shares in Genting Plantations closed up two sen at RM11.44 today on some 277,500 shares traded. The group has a market capitalisation of RM9.13 billion.