KUALA LUMPUR, Jan 27 — Sime Darby Bhd’s shares rose in early trade today following the announcement on spinning off its plantation and property segments for separate listings on Bursa Malaysia.

At 10.14am, the company’s share price increased 43 sen to RM9.25 with 6.79 million changing hands.

In a statement, Sime Darby said it plans to create three pure play stand-alone businesses in the plantation, property and trading and logistics sectors.

This will be done by floating the shares in its plantation and property arms, while retaining its trading and logistics business under the current listed entity.

The group will be evaluating the implementation measures and indicative timelines to give effect to the board’s decision.

Upon receiving final approval of the board following the evaluations, the company shall make appropriate disclosures.

Sime Darby President and Group Chief Executive Officer Tan Sri Mohd Bakke Salleh said Sime Darby Plantation Bhd’s downstream unit (currently Sime Darby Plantation Sdn Bhd) has been restructured from a loss-making unit in 2007, into a profitable and steadily growing business, with a total of 11 refineries.

"Upon the strong foundation we have reinforced in the upstream sector, Sime Darby Plantation has positioned itself to become a major player in the downstream sector, fulfilling the aspirations at the time of the merger, to create the world’s leading integrated plantation company,” he added.

Meanwhile, Sime Darby Property Bhd has evolved into an integrated developer, with access to some of the most strategic land banks in Malaysia.

"After the listing of Sime Darby Plantation and Sime Darby Property, Sime Darby Bhd will be a more focused company.

"The steady businesses of Sime Darby Industrial and Sime Darby Motors will anchor its future growth, while the Logistics and Healthcare Divisions will offer exciting opportunities in the future,” said the conglomerate.

In a separate note, Hong Leong Investment Bank said it is positive on the latest development, as the planned spin-offs allow Sime Darby to crystalise the value of its businesses.

"Besides, the spin-offs allow each business to take advantage of potential growth and opportunities,” it said in a note today.

Hong Leong Investment Bank has maintained its "buy” view on Sime Darby, underpinned by the spin-off plan and its recent completion of private placement, which has strengthened the company’s balance sheet.

"We kept our target price at RM10.06 and anticipate better quarters ahead on the back of improved plantation and property earnings,” said the research house. — Bernama