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 Business

Priceworth’s cash option gets extension

16th May, 2018

KUALA LUMPUR: Priceworth International Bhd’s cash option to acquire a timber concession area, Forest Management Unit 5 (FMU5) in Sabah, at a discounted RM235 million has been extended until May 22, the day of the shareholders’ meeting called to approve the proposed acquisition.

In a statement, the sustainable forest management group said it signed a supplemental letter with vendor Transkripsi Pintar Sdn Bhd in respect of the October 2016 sale and purchase agreement to buy FMU5, extending the option period to May 22.

“The cash option represents a discount of RM25 million on the original RM260 million purchase price for FMU5 which has been valued at RM433.8 million. FMU5 is a sustainable forest management concession with a net concession area of 88,920 hectares of commercial Class II forest in Sabah’s Trus Madi forest reserve.

“We appreciate the vendor’s understanding and patience with the acquisition process,” said Executive Director, Richard Koo.

He said FMU5 is a game-changing acquisition that will provide the group with a sustainable supply of logs to support its downstream businesses.

Priceworth is acquiring FMU5 through its Singapore subsidiary GSR Pte Ltd, which will also be acquiring sister company Sinora Sdn Bhd, Priceworth’s plywood manufacturing arm.

It is also planning an initial public offer (IPO) of GSR on the Singapore Exchange (SGX).

“The group has seen its first half net profit more than triple on rising contribution from operations in FMU5, to RM4.78 million. Last month, it saw its highest production volume since 2011 when Sabah adopted a new sustainable forestry policy in 2010,” it said. –Bernama

   
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