KUALA TERENGGANU: Terengganu subsidiary company TDM Bhd and a minority shareholder yesterday signed a conditional sale and purchase agreement (CSPA) for the disposal of 100 per cent equities in Indonesia-based companies PT Rafi Kamajaya Abadi (RKA) and PT Sawit Rezki Abadi (SRA) to Ikhasas Sawit Sdn Bhd.
TDM executive director Najman Kamaruddin said the CSPAs involved a cash consideration of RM115 million.
"With the significant cost savings and capital generated from the disposal, TDM can focus its resources and attention on the company's operations in Malaysia. This includes initiatives to optimise production from the company's land on the East Coast by diversifying other crop ventures in addition to oil palm plantations and crude palm oil production.
"With the disposal process now going according to plan, TDM is determined to further enhance efforts to create and improve value for stakeholders in the future," he said in a statement today.
Najman said TDM owned 93.8 per cent of RKA which was incorporated in 2007 and 95 per cent of SRA which was incorporated in 2011.
He said RKA had suffered losses since its incorporation until the financial year ending Dec 31, 2020 while SRA had suffered losses since its inception.
He said in addition to the CSPAs, TDM also signed a management services agreement with PT Ikhasas Indo Makmur for the acquisition of operational control over the assets that are being disposed of while waiting for the process to be completed by the first quarter of the financial year 2025.
"TDM will gain gross proceeds of RM112 million from the disposal excluding the minority shareholders' share, of which RM74.2 million will be allocated for the refinancing of interest-bearing loans and RM29.3 million for general working capital.
"The remaining RM8.5 million will be used for expenses related to the disposal exercise.
"Meanwhile, the arrangement of management services will allow TDM to save a large amount of cash flow that can be utilised for more productive activities which otherwise would be used to maintain RKA's operations," he said. -- BERNAMA