KUALA LUMPUR (Oct 14): CB Industrial Product Holding Bhd (KL:CBIP) is divesting its entire interest in Admiral Potential Sdn Bhd (APSB) and its Indonesian subsidiary PT Jaya Jadi Utama (PT JJU) to UK-listed Anglo-Eastern Plantations plc (AEP) for RM38.25 million. 

The move is part of its efforts to streamline operations and marks the group’s full withdrawal from its plantation operations in Indonesia.

In a filing with Bursa Malaysia, CBIP said the divestment was formalised via a share subscription agreement signed on Tuesday. Under the deal, AEP will subscribe to new ordinary shares in APSB equivalent to 150 billion Indonesian rupiah, and assume the cash balances held by both APSB and PT JJU.

Upon completion, APSB and PT JJU will cease to be CBIP’s direct and indirect subsidiaries respectively.

CBIP said the transaction is expected to result in a disposal loss of RM8.23 million, after accounting for investment costs, post-acquisition adjustments, and incidental expenses. 

Nevertheless, the board maintained that the divestment is in the group’s best interest and will enhance operational efficiency over the long term. It will also allow CBIP to recover RM47.12 million in advances previously extended to APSB and PT JJU, which will be channelled to general working capital.

The disposal aligns with the strategy to consolidate resources and refocus on profit-generating segments, CBIP said. Barring unforeseen circumstances, the transaction is expected to be completed by the fourth quarter of 2025.

APSB, incorporated in 2011, holds a 94% stake in PT JJU, which manages a 7,169-hectare oil palm plantation in Central Kalimantan. Of this, 1,153 hectares have been planted, while 5,772 hectares remain plantable.

Both subsidiaries have been loss-making. For the financial year ended Dec 31, 2024, APSB posted a net loss of RM71,724 and net liabilities of RM370,078, while PT JJU recorded a net loss of RM3.64 million and net liabilities of RM2.79 million. Accumulated losses stood at RM370,080 for APSB and RM14.53 million for PT JJU.

Prior to completion, CBIP will procure APSB to acquire the remaining 6% stake in PT JJU, resulting in full ownership before AEP’s entry. Proceeds from the subscription will be used to settle all outstanding liabilities of PT JJU and APSB — including trade creditors, tax obligations, and accrued expenses — before repaying amounts owed to CBIP.

AEP, incorporated in England and Wales, operates oil palm estates in Indonesia and Malaysia. Listed on the London Stock Exchange, it has a market capitalisation of £527.39 million (RM2.96 billion). Major shareholders include Genton International Ltd (51.47%) and Nokia Bell (17.83%).

Executive director Marcus Chan Jau Chwen currently leads AEP. He is the son of the late Dick Chan Teik Huat and Lim Siew Kim, who took control of AEP in November 1993 through Genton International, after acquiring a controlling stake from a British firm facing financial difficulties.

The late Lim Siew Kim was the daughter of Genting group founder Tan Sri Lim Goh Tong.

While AEP maintains a modest presence in Malaysia — operating a 3,414-hectare estate in Cenderung, Terengganu — its Indonesian footprint is significantly larger. The group manages seven estates in North Sumatera, two each in Bengkulu and Kalimantan, and one each in Bangka and Riau, covering a total of 65,686 hectares.

As of Tuesday’s closing, CBIP shares were down one sen or 0.8% at RM1.25, valuing the company at RM616.56 million. Year to date, the stock has declined 8.1%.