KUALA LUMPUR (Sept 19): Kuala Lumpur Kepong Bhd (KLK) acquired an additional 1.34 million Boustead Plantations Bhd (BPlant) shares from the open market on Monday, according to a Bursa Malaysia filing on Tuesday.
The additional 1.34 million shares, transacted at RM1.45, amounted to RM1.94 million and, whether coincidentally or not, were acquired after Defence Minister Datuk Seri Mohamad Hasan during the 12th Malaysia Plan's (12MP) Mid-Term Review debate session last week defended the Armed Forces Fund Board's (LTAT) proposed move to offload a 33% stake in BPlant to KLK for RM1.15 billion.
A check on local bourse filings revealed that KLK had put a halt in acquiring more BPlant shares for a week. The latest acquisition prior to this was on Sept 7.
During the debate, Mohamad stressed that the RM1.15 billion stake disposal is needed to address issues of the cash flow and debt settlement of BPlant’s parent company, Boustead Holdings Bhd, which has to pay off debts of RM800 million by year end.
The defence minister also pointed out that if the BPlant stake disposal is not undertaken and Boustead falls into bankruptcy, LTAT would face a severe problem as 50% of the fund's assets are in Boustead.
A number of Opposition MPs have been critical of the LTAT deal, claiming that this would damage Malaysia’s aim of achieving the 12MP’s Bumiputera corporate equity target of 30% by 2025.
On Aug 24, KLK proposed to buy 33% stake plus one additional share in BPlant for RM1.15 billion or RM1.55 per share.
It also planned to take the company private via a mandatory general offer.
On Sept 11, KLK, Boustead and LTAT agreed for the cut-off date for a strategic collaboration agreement (SCA) to be extended to Sept 22.
LTAT’s stake in BPlant will shrink to 35% from 68% if the deal goes through.
Shares in KLK settled four sen or 0.19% higher at RM21.52, giving the company a market capitalisation of RM23.26 billion.
Shares in BPlant, meanwhile, closed two sen or 1.37% higher at RM1.48, valuing the plantation company at RM3.32 billion.
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A KLK lifeline for Boustead Plantations and LTAT
KLK to buy major stake in Boustead Plantations from LTAT, and to take firm private
KLK proposes to buy 33% and one share in BPlant for RM1.15b, take company private, confirming The Edge’s report