KUALA LUMPUR (July 29): TDM Bhd has disposed of its entire stake in two Indonesian plantation firms for a total of RM115 million, a move aimed at exiting Indonesia and focusing its resources on its Malaysian operations.

One of the firms, PT Rafi Kamajaya Abadi, has been loss making since its incorporation up till Dec 31, 2020 while the other,  PT Sawit Rezki Abadi, has also been loss making since its incorporation, said TDM in a filing with Bursa Malaysia.

The Terengganu State-controlled group added that the purchaser,  Ikhasas Sawit Sdn Bhd, is principally involved in the business of growing plants for planting, fibre crops and oil palm.

“The proposed disposal is expected to improve the group’s financial position as TDM Group will no longer have to fund the operations and/or upkeep of such plantation assets, which are generally capital intensive in nature,” the group said.

It said the gross proceeds from the disposal amounting to RM112 million will be used largely for repayment of its borrowings.

The group expects the two stake disposals to be completed by the third quarter of 2023 and first quarter of 2025, respectively.

Affin Hwang Investment Bank Bhd has been appointed as the principal adviser for the disposals.

Shares in TDM closed unchanged at 22.5 sen, giving the group a market capitalization of RM387.65 million.