KUALA LUMPUR (April 17): Harn Len Corp Bhd (KL:HARNLEN) has obtained up to RM94 million in term loans from Affin Bank Bhd (KL:AFFIN), mainly to refinance borrowings and support ongoing plantation development.

In a bourse filing on Friday, the company said the largest portion of RM60 million will be used to refinance or redeem existing borrowings tied to 10 parcels of leasehold oil palm land located in Keratong, in Pahang's Rompin district. Any remaining funds from this four-year term loan will be allocated for working capital.

A second term loan of RM30 million, with a tenure of up to 14 years, will be used to finance the development of oil palm and pineapple estates, and for maintenance and related infrastructure works under an ongoing project undertaken by a subsidiary.

The remaining RM4 million facility will be used to finance insurance premiums for credit or mortgage reducing term assurance schemes for the group’s joint directors and shareholders.

The facilities are secured against the same 10 parcels of oil palm land in Pahang, with a corporate guarantee of RM94 million provided by Pahang Coconut Valley Corporation Sdn Bhd.

Harn Len said the company’s controlling shareholder, the Low family, is required to remain as the majority shareholder and continue managing the business throughout the tenure of the loans, failing which the bank reserves the right to revise the facilities.

The company added that the borrowings are not expected to materially affect its net assets or earnings for the financial year ending May 31, 2026, aside from associated interest costs.

However, its gearing ratio is projected to increase to 0.35 times from 0.26 times, assuming full drawdown of the facilities.

Harn Len shares closed four sen or 5.8% lower at 65 sen on Friday, valuing the company at RM421.9 million.