KUALA LUMPUR (Dec 29): Harn Len Corporation Bhd has proposed to acquire an aquaculture outfit which owns 30 ponds on a 300-acre piece of land in Pekan, Pahang from its substantial shareholder, Mohamed Nizam Jakel, through a RM42.5 million share deal.

In a bourse filing on Friday, the Johor-based oil palm planter and property developer said it had entered into a conditional share sale agreement with Nizam to acquire the entire 100,000 shares in Tiger Aquaculture Sdn Bhd (TASB).

Under the terms of the deal, the RM42.5 million purchase consideration will be satisfied through the issuance of 47.22 million new Harn Len shares, constituting 7.71% of its enlarged share base, to Nizam.

The issuance of new shares will involve both ordinary shares and Class A Islamic Redeemable Convertible Preference Shares (RCPS-i A) at 45 sen per share, raising Nizam's stake in Harn Len to 12.8%.

Harn Len also proposes to amend its constitution to facilitate the creation and issuance of the RCPS-i A, according to the filing.

Harn Len said that the acquisition is aimed at reducing its dependence on the oil palm plantation segment and diversifying its earning base by adding income from the aquaculture business.

"Harn Len has been actively participating in the operation of the five ponds since the signing of the Memorandum of Agreement (MOA) with TASB and has seen positive progress in the breeding of prawns. Accordingly, we believe that the proposed acquisition could enhance the group’s profitability and shareholder value," it said.

Harn Len had signed the binding MOA with TASB on Aug 24 to jointly operate the aquaculture business,

The group on Friday said the proposed acquisition will enable it to further expand its presence in the agriculture industry and diversify into pineapple plantations, considered a food security crop.

The acquisition, subject to the approval of Harn Len shareholders and Bursa Securities, is expected to be completed in the second quarter of 2024. Malacca Securities has been appointed as the principal adviser for the proposals.

On June 1, Harn Len also completed the acquisition of Almal Resources Sdn Bhd from textile giant Jakel Group, increasing Harn Len’s land bank to 46,775 acres. Nizam also sits on the board of Jakel Group.

Shares in Harn Len settled half a sen or 1% lower at 50 sen, giving the group a market capitalization of RM289.2 million.