LTAT, BHB and KLK signs strategic collaboration agreement

KUALA LUMPUR: Lembaga Tabung Angkatan Tentera (“LTAT”), Boustead Holdings Berhad (“BHB” or “the Group”), and Kuala Lumpur Kepong Berhad (“KLK”) are pleased to announce the signing of a tripartite Strategic Collaboration Agreement (“SCA”) in relation to Boustead Plantations Berhad (“BPlant”). The SCA provides a framework for value creation for LTAT, BHB and KLK.

Under the SCA, LTAT, BHB and KLK (“Joint Offerors”) will undertake a mandatory take -over offer (“Offer”) to acquire all the remaining BPlant shares not already owned by the Joint Offerors at cash offer price of RM 1.55 per BPlant share.

The Offer is triggered as a direct outcome of the acquisition by KLK of a total of 739,199,966 ordinary shares in BPlant representing 33% and 1 share of the total issued shares of BPlant from BHB, for a cash consideration of RM 1.15 Billion or RM 1.55 per ordinary share in BPlant (“Proposed Acquisition”). The offer price values BPlant at RM 3.47 Billion.

Currently, BHB holds a 57.42% stake in BPlant while LTAT holds a 10.59% stake in the plantation company.

The objective of the strategic collaboration with KLK, a leading player in the palm oil industry, is to enhance the long-term operational efficiencies and crude palm oil yields of BPlant's plantations for the mutual benefit of the parties. This collaboration is expected to contribute positively to BPlant's financial position over the long term.

As part of the value creation exercise under the SCA, BHB and LTAT are granted the first right of refusal to deal with two plantation estates, namely Balau and Bukit Mertajam (Mayfield Division) estates, with a total acreage of approximately 1,800 acres, for the purpose of development of the land hence providing added value to BHB.

LTAT Chief Executive Dato’ Nazim Rahman said, “This timely strategic collaboration marks the beginning of the Reset strategy for Boustead Holdings Berhad, which will result in significant value enhancement to the Group. LTAT remains steadfast at realising its MAMPAN25 Strategic Plan 2023-2025 through a robust portfolio rebalancing exercise with a clear mission of advancing the socio-economic well-being of the Armed Forces and Veterans.

We firmly believe that this strategic collaboration with its synergies will unlock greater value for all stakeholders within the business value chain. We are confident that this will put both BHB and LTAT on a firm footing towards a sustainable future.”

KLK Chief Executive Officer Tan Sri Dato’ Seri Lee Oi Hian said, “This strategic collaboration will not only strengthen the existing co-operation between KLK and BHB, but it provides a major boost to the long-term growth strategy of KLK Group’s plantation business. We are humbled to be entrusted as a partner to co-operate and deliver improvements to BPlant’s estates, in synergy with our own estates. We are optimistic that this corporate exercise willbring positive benefit for Malaysia’s palm oil industry as a whole.”

The collaboration will strengthen the existing partnership between these prominent entities and is expected to contribute positively to the Malaysian palm oil industry.