KUALA LUMPUR (March 6): QL Resources Bhd (KL:QL) said it is buying the remaining equity interest in Indonesian plantation firm PT Pipit Mutiara Indah (PMI), making it an indirectly wholly-owned unit as part of a settlement to resolve a dispute dating back five years.
In a filing to Bursa Malaysia on Friday, the company said its wholly-owned QL Oil Sdn Bhd (QLO) has entered into a settlement agreement with Hang Ting Pte Ltd (HT) and PT Pipit Citra Perkasa (PCP).
Under the agreement, QLO will acquire the remaining 21.58% stake in the joint venture QL Mutiara (S) Pte Ltd from HT. QLO will also acquire a 5% direct stake in PMI from PCP. QL Resources already owns a 95% stake in PMI. The total settlement acquisition is valued at US$14.65 million (about RM57.8 million).
Upon completion, PMI will become a wholly-owned unit of QLO, making it an indirect wholly-owned subsidiary of QL Resources.
Beyond the share purchase, the agreement outlines several financial reconciliations:
- Interest payments: PMI will pay US$6.76 million in interest on shareholder advances to HT, PT Pipit Intis, and Haryanto.
- HT and PCP will pay US$2.65 million to QLO. This compensates for land where plantation rights (state-owned land use) were never obtained under the original joint venture agreement.
The conflict began in August 2021, when PCP — owned by the family of the late Kristianto Kandi Saputro — sued PMI, QL Mutiara and QL Resources director Chia Seong Fatt in his capacity as director of PMI. PCP alleged that mismanagement of PMI had led to eight years of continuous losses from 2012 to 2020, depriving them of dividends.
In December 2021, QL Resources obtained an injunction to stop PCP from pursuing the case in Indonesia. QL Resources claimed, however, that PCP, in breach of both the injunction and the joint venture agreement, continued the proceedings until around March 2022.
Subsequently, in August 2023, QLO initiated arbitration proceedings at the Singapore International Arbitration Centre against PCP and its associate company HP, seeking damages and compliance with to compel compliance with the joint venture agreement.
In its Friday filing, QL Resources said the settlement will be financed by internal funds from QLO and PMI, and borrowings. The settlement effectively terminates all prior joint venture and subscription agreements. All parties have agreed to release each other from further claims without any admission of liability.
The transaction is expected to be finalised within four weeks, at which point all outstanding arbitration and lawsuits will be withdrawn.
QL Resources' shares closed one sen higher at RM3.95 on Friday, giving the group a market capitalisation of RM14.4 billion.