KUALA LUMPUR: Rimbunan Sawit Bhd (RSB) has signed two agreements with Mahawangsa Sungai Bok Plantation Sdn Bhd (MSBPSB) to sell agricultural land in Miri, Sarawak, for a total of RM165 million.
RSB told the stock exchange that on Dec 21, 2023, its wholly-owned subsidiary, R. H. Plantation Sdn Bhd, entered into a conditional sale and purchase (SAP) agreement to sell 4,857 hectares (ha) of agricultural land, along with the buildings constructed thereon and the oil palm plantation (Selangor Estate), to MSBPSB for RM90 million (RM18,529.96 per ha) in cash.
A different agreement was made with MSBPSB by Jayamax Plantation Sdn Bhd, another wholly-owned subsidiary, to sell 5,077.66ha of agricultural land along with the buildings and oil palm plantation (Jayamax Estate) on it for RM75 million (RM14,770.58 per ha) in cash.
MSBPSB, formerly known as Hua Seng Plantation Sdn Bhd, is principally involved in oil palm plantations.
According to the filing, the director and shareholder of MSBPSB is Tan Sri Yee Ming Seng.
The proposed disposals, according to RSB, were determined on a "willing buyer-willing seller" basis after accounting for the land's market values as determined by an independent market valuer and the disposal land's total net book value, which came to about RM86.38 million based on the most recent audited consolidated financial statements of RSB and its subsidiaries as of December 31, 2022.
RSB said that under the discounted cash flow, the annual income accruing to the disposal land is estimated based on forecasted yields and the price of fresh fruit bunches (FFB).
"The estimated cost of production and other expenditures are then deducted therefrom to arrive at the net income, which is then capitalised at an appropriate rate of return for the remaining cropping life of the oil palm to obtain the value of the present crops.
"The scrub value, or basic land value, to which the land reverts at the end of the economic life of the cultivations is then added to the value of the present crops," RSB said.
RSB said in the filing that the original cost and date of investment were RM118 million for the Selangor Estate (June 3, 2011) and RM40.378 million for the Jayamax Estate (Sept 15, 2010).
Based on the latest audited consolidated financial statements of RSB as of Dec 31, 2022, the group is expected to realise an estimated one-off pro forma gain of about RM77.94 million in relation to the proposed disposals.