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KUALA LUMPUR (June 22): Ta Ann Holdings Bhd has established two joint venture agreements (JVAs) with Pelita Holdings Sdn Bhd through its wholly-owned subsidiary Ta Ann Plantation Sdn Bhd (TAP) to implement oil palm development projects in partnership with the Sarawak state government.
In a filing with Bursa Malaysia today, Ta Ann (valuation: 1.4, fundamental: 1.4) said that the joint venture companies (JVCs) would undertake the projects on parcels of Native Customary Rights (NCR) land in Sarawak amounting to an estimated 16,917 hectares of plantable area.
The parcels of land are located in Sibu and Kapit.
“Eventual issued and paid-up capital for the JVCs are expected to be RM51 million for the parcels of land in the Sibu division and RM33.5 million for the Kapit division,” it said.
The procurement of the NCR lands will be undertaken by Pelita Holdings, a subsidiary of PELITA (Land Custody and Development Authority), a statutory body under the Ministry of Rural and Land Development, Sarawak.
“Capital and investment outlay will be incurred on a staggered basis depending on the progress of participation by the NCR owners,” Ta Ann said.
It added that its equity participation will be financed through the group’s internally generated funds, whereas project financing will be sought from financial institutions to develop the said lands into oil palm estates.
Ta Ann will have a 60% equity stake in each JVC while Pelita Holdings will hold 30% as a trustee of the NCR owners and 10% independently.
“The JVAs will enable the group to further increase its total acreage of oil palm plantations in line with the group’s aim of continually expanding its oil palm division,” Ta Ann said.
JVAs had previously been established between Ta Ann and Pelita Holdings in 2012 for similar developments but due to lack of interest by land owners at the time, the companies did not proceed with the projects.
Ta Ann closed at RM3.83 today, up 0.26% with 35,000 shares traded.
(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)