Boustead looks at options for Penang land

Oil palm planter Boustead Plantations Bhd is mulling whether to sell or develop with a joint-venture partner the huge tract of land it still owns in Seberang Perai, Penang.

The company is left with 701.22 ha there after selling part of the land, measuring 677.78 ha, to SP Setia Bhd for RM620.1mil cash.

“We could sell either it (the 701.22 ha) outright to our sister company or form a joint venture to develop

PETALING JAYA:

the land ourselves,” said Boustead Plantations vice-chairman Tan Sri Lodin Wok Kamaruddin after company’s AGM and EGM.

“As it is located in the prime area, it is more suitable to monetise the land into property development,” he added.

On the utilisation of the sale proceeds, Lodin said RM300mil had been earmarked for acquisition of palm oil plantation land, RM287mil would be used for repayment of borrowings, RM27.8mil for real property gains tax and the remaining RM5.3mil to pay for expenses of the proposed sale.

“We are open to buy any land, greenfield or planted areas. But it will preferably be in Malaysia.

“Our gearing ratio will also improve to 0.23 times from the current 0.41 times following the repayment of borrowings,” he said.

Lodin said the company is also looking at its other land in prime areas to dispose of or develop into lucrative property development projects.

“We have 11,000 acres of land near Pengerang in Johor and another 1,600 acres in Kulai,” he said.

On capital expenditure for this year, Lodin said Boustead Plantations has set aside RM40mil for replanting purposes.

“We have replanted about 30% of our plantation areas with new planting materials and we will continue to do so.

“We will also continue to work on our efficiency and mechanisation to improve production and further reduce operational costs,” he said.

Lodin predicts the company’s crude palm oil production would be at one million tonnes this year, a recovery of 5% over 2016.