Sime Darby, I&P Group Exchange Assets for Strategic Fit

Kuala Lumpur, 6 October 2016 – Sime Darby Berhad has entered into transactions with I&P Group Sdn. Berhad to exchange assets that would result in a better strategic fit for the respective companies.

Sime Darby will expand its plantation area in Malaysia for the first time since 2007 while I&P Group will secure a sizeable piece of land in Semenyih, Selangor. Sime Darby Property in turn, will unlock the value of its Semenyih land to fund strategic property development projects.

“This is a deal that makes sense for both parties. We were able to match our needs in line with our growth plans. The Plantation Division will be buying brownfield assets, its first land expansion in Malaysia since 2007 and it will immediately contribute to earnings. Our Property Division will be able to focus on strategic developments such as the Malaysia Vision Valley and City of Elmina,” said President and Group Chief Executive Tan Sri Dato’ Seri Mohd Bakke Salleh.

Sime Darby Plantation has proposed to acquire two oil palm estates measuring 769 hectares and a mill in Yong Peng, Johor from I&P Group for RM106.7 million.

It is buying the oil palm estates and mill from Yong Peng Realty Sdn Bhd (YPR) and Perusahaan Minyak Sawit Bintang Sendirian Berhad (PMSB). YPR owns Lian Seng Estate in Batu Pahat and Talisman Estate in Kluang, Johor. About 98 per cent of both estates, which are near Sime Darby Plantation estates in central Johor, are planted with oil palm. PMSB owns a 70 metric tonne (MT) per hour oil mill which is licensed to process 360,000 MT of fresh fruit bunches a year.

In addition, Talisman Estate has the potential for property development as it is located about 12km away from Kluang.

“This is a rare opportunity for us to acquire quality brownfield estates in Peninsular Malaysia. Not only will we get immediate earnings but we will be able to deliver more value generating synergies and cost savings by sharing estate and mill management,” said Datuk Franki Anthony Dass, Managing Director, Sime Darby Plantation. 

Separately, The Glengowrie Rubber Company Sdn Bhd (GRC), a subsidiary of Sime Darby Property Bhd, has proposed to dispose two parcels of land in Semenyih, measuring 805 acres, to Petaling Garden Sdn Bhd, a subsidiary of I&P Group, for RM428.8 million.

The GRC land is located in the Hulu Langat District, which is not a key development focus area for Sime Darby Property. As the disposal is a related party deal due to Sime Darby and I&P sharing common major shareholders, it will require the approval of GRC’s minority shareholders.

“This is an opportunity to unlock the value of our assets at a reasonable consideration during a softening property market. This will free resources for strategic projects such as the City of Elmina, a new township that is being developed with wellness and liveability in mind,” said Dato’ Ir. Jauhari Hamidi, Managing Director of Sime Darby Property.

The land disposal and asset acquisition are not conditional upon one another.

About Sime Darby 
Sime Darby is a Malaysia-based diversified multinational involved in key growth sectors, namely, plantation, industrial equipment, motors, property and logistics. Founded in 1910, its business divisions seek to create positive benefits in the economy, environment and society where it has a presence. 
 
With a workforce of 120,000 employees in 26 countries and 4 territories, Sime Darby is committed to building a sustainable future for all its stakeholders. It is one of the largest companies on Bursa Malaysia with a market capitalisation of RM46.93 billion (USD 11.28 billion) as at 5 October 2016.

For further information, please contact:

Shahriman Johari
External Communications 
Group Communications
Sime Darby Berhad
Tel: +(603) 2711 0923 
Mobile: +(6019) 333 8320 
Email: shahriman.johari@simedarby.com