KUALA LUMPUR (Dec 14): Plantation giant Kuala Lumpur Kepong Bhd (KLK) and its Singapore incorporated wholly-owned subsidiary, KLK Plantations and Trading Pte Ltd have proposed to acquire more than 90% stakes in two Indonesian palm oil companies for a total purchase price of RM276.55 million in a related party transaction.

In a local bourse filing on Thursday, KLK said it has entered into a share sale agreement with Batu Kawan Bhd’s wholly-owned unit Whitmore Holdings Sdn Bhd.

Batu Kawan is the parent company of KLK with a 47.72% stake.

KLK is acquiring a 92% stake in PT Satu Sembilan Delapan (SSD) for RM264.1 million and a 90% stake in PT Tekukur Indah (TI) for RM12.42 million.

“The estates under SSD and TI have been managed by KLK since their commencement of operation and KLK has good knowledge of these properties and their economic potential,” said the company.

The proposed acquisition is expected to streamline and consolidate the plantation estates of the larger group under KLK.

“Furthermore, (it) will be a source of feedstock for KLK’s upcoming refinery and oleo complex in East Kalimantan due to its proximity,” it said.

KLK added that it is planning to fund the proposed acquisition with its existing cash reserves.

As at September 30, 2023, KLK has a cash reserve of RM2.38 billion with total assets of RM30.13 billion.

The proposed acquisition will be completed by the fourth quarter of this year.

Shares in KLK closed unchanged at RM21.50, giving it a market capitalization of RM23.24 billion.