KUALA LUMPUR, Aug 18 — Genting Plantations Bhd’s indirect subsidiary, AsianIndo Holdings Pte Ltd, has entered into a conditional sale and purchase agreement with Lee Rubber Company (Pte) Ltd to acquire its 100 per cent stake in Knowledge One Investment Pte Ltd (KOI) for US$94.97 million (RM407.2 million).

KOI, through its 85 per cent subsidiary in Indonesia, PT Kharisma Inti Usaha (PT KIU), holds the rights to cultivate oil palm on 14,661 hectares in Kabupaten Tapin, South Kalimantan, Indonesia.

"Upon completion of the proposed acquisition, Genting Plantations will have an effective equity interest of 85 per cent in PT KIU,” said the group in a filing to Bursa Malaysia today.

The proposed acquisition would be completed around the fourth quarter of 2017 and would be financed through external funding, it added. 

Genting Plantations also said the proposed acquisition would represent a strategic investment by the group as an expansion initiative in Indonesia, which is expected to contribute positively to the earnings, as well as, to shareholders’ value in the future.

PT KIU’s land is situated close to Genting Plantations’ other landbank in Kalimantan Tengah, thereby providing potential benefits from operational synergies and economies of scale, it noted. 

"The proposed acquisition will increase the group’s combined plantation land bank in Malaysia and Indonesia to 242,597 hectares from the current 227,936 hectares,” it added.

The move would also accelerate the group’s upstream expansion in Indonesia as some 12,893 hectares had already been planted, thus increasing Genting Plantations total planted area in Indonesia to 84,833 hectares from 71,940 hectares, as at Dec 31, 2016. — Bernama