KUALA LUMPUR (June 10): KUB Malaysia Bhd is disposing of two oil palm estates measuring an aggregate 2,656 hectares in Kluang, Johor for RM158 million cash. 

In an exchange filing today, KUB said Kahang Estate and Sungai Yong Estate — both held via indirect wholly-owned unit KUB Agro Holdings Sdn Bhd — are being sold to Beradin Plantation Sdn Bhd.

The group said 44.8% of the 956-hectare Kahang Estate comprises immature trees aged below four years, while the remaining 55.2% is made up of old trees aged above 20 years.

Meanwhile, 95% of the 1,700-hectare Sungai Yong Estate comprises old trees, while the remaining 5% consists of prime trees aged between four and 20 years.

The two estates collectively produced 32,782 tonnes of fresh fruit bunches in 2019. 

KUB cited the deal as an opportunity to dispose of the estates at above its market valuation of RM156 million, adding that the market value has appreciated over time. 

“The group would also be able to avoid incurring significant capital expenditure for the estates going forward, as the majority of its oil palms are categorised as old and would need to be cleared and replanted in phases in the coming years,” it added. 

Overall, KUB expects to realise a gain of RM122.1 million or 21.94 sen per share arising from the proposed disposal. 

Shares of KUB Malaysia closed 3.5 sen or 8.97% higher at 42.5 sen, valuing the group at RM236.5 million.