KUALA LUMPUR (Dec 22): Plantation group Kim Loong Resources Bhd (KL:KMLOONG) said it is acquiring a 75% stake in a firm that owns 51.73 hectares of land in Selanjan district that is intended for the construction of a palm oil mill, in a related-party transaction.

The group is buying the stake in Kim Loong Mills (Sarawak) Sdn Bhd for RM10 million in cash from Kim Loong Plantations Sdn Bhd, a wholly owned unit of Sharikat Kim Loong Sdn Bhd, according to a filing with the stock exchange on Monday.

Sharikat Kim Loong is the major shareholder of Kim Loong Resources. It is the private vehicle of the family of the group's executive chairman, Gooi Seong Lim, with his brothers Gooi Seong Heen, Gooi Seong Chneh, and Gooi Seong Gum also sitting on the board of Kim Loong Plantations.

Kim Loong Resources said the acquisition of the land in Lachau, Pantu aligns with its strategy to set up a palm oil mill near its existing Sarawak plantations, where suitable milling sites are limited.

It expects the mill to boost the group’s revenue and profit in the long term once built and operational.

Kim Loong Resources said it plans to fund the acquisition from internal resources. As of the end of July, the group’s cash and bank balances stood at RM254.2 million.

Shares of Kim Loong Resources ended one sen, or 0.4%, higher at RM2.39 on Monday, giving it a market capitalisation of RM2.35 billion. Year to date, the counter has fallen over 4%.