KUALA LUMPUR (Jan 9): Major shareholders of NPC Resources Bhd (KL:NPC) are in talks for a proposal that could lead to the Sabah-based palm oil producer being taken private at RM2.82 per share.

The discussions are exploratory and are still ongoing, and there is no certainty the proposal will be implemented, according to a joint statement from Jubilant Ventures Sdn Bhd and executive director and group managing director Datuk Loo Pang Kee.

If the proposal materialises, the price at which NPC will be privatised will not be lower than RM2.82 per share, they said.

“Shareholders are advised that this is not a notice of firm intention from the joint offerors to privatise NPC and there is no certainty that the proposal will be implemented. In this regard, shareholders are advised to exercise caution when dealing in shares in NPC Resources,” the group said in the bourse filing.

Loo, the co-founder of the plantation company, currently is the largest substantial shareholder of NPC Resources, holding a 24.34% direct stake and a 31.62% indirect stake through its private company Jubilant Ventures, Bloomberg data showed. Other substantial shareholders include Tan Sri Koh Kin Lip, who holds a 16.95% direct stake and a 2.41% indirect stake.

The announcement followed a surge in the share price of the usually thinly traded counter, which hit an all-time high of RM3.30 during intraday trading on Thursday, up 14% or 40 sen from its previous close of RM2.90. For context, NPC Resources shares traded between RM1.61 and RM2.06 throughout 2024, averaging at RM1.84.

Trading in NPC Resources shares was halted from 2.30pm to 3.30pm on Thursday following the announcement.

NPC Resources primarily operates in oil palm plantations and palm oil milling, focusing on East Malaysia and Indonesia. The group also engages in fresh fruit bunches (FFB) trading, transportation services, marine fish farming, and hospitality, including operating The Palace Hotel in Sabah.  

According to its 2023 annual report, the group manages two palm oil mills with a combined FFB processing capacity of 135 tonnes per hour. In Sabah, NPC Resources oversees 10,776 hectares of plantation land, including 6,767 hectares in the Sandakan region and 4,009 hectares on Banggi Island. Its Sabah mill processes 75 tonnes of FFB per hour.  

In Indonesia, NPC Resources manages 45,064 hectares of plantation land in Kalimantan Timur. As of 2023, 20,579 hectares were planted, with its palm oil mill in Desa Senambah processing 60 tonnes of FFB per hour.  

In 2024, NPC Resources entered into two separate agreements to divest its lands and subsidiaries.

That includes the divestment of 7,505 acres (3,037 hectares) of oil palm land — held though its three subsidiaries — located in the Labuk-Sugut district to Tamaco Plantation Sdn Bhd for RM165.11 million in February. Meanwhile in September, NPC Resources sold its loss-making Indonesian oil palm unit PT Enggang Alam Sawita for RM29.33 million.

For the nine months ended Sept 30, 2024 (9MFY2024), NPC Resources posted a net profit of RM35.79 million, more than double the RM14.54 million recorded in the same period last year. Revenue grew 4% to RM350.59 million, compared to RM337.11 million in 9MFY2023.  

The improved performance was attributed to higher average selling prices for crude palm oil and palm kernel, as well as lower fertiliser costs across operations in Sabah and Indonesia.