Global Palm Resources said on Wednesday that its wholly owned subsidiary Global Palm Resources (GPRPL) has agreed to acquire a total of 95 percent of Indonesian palm oil plantation player PT Bumi Raya Agro.
Under the deal, GPRPL will acquire 94.98 percent, or 5.62 million shares, of Bumi Raya Agro from PT Bumiraya Utama for 23.61 billion rupiah, or around S$2.22 million, it said in a filing to SGX before the market open on Wednesday.
GPRPL will also acquire 1,000 shares, or 0.02 percent, of Bumi Raya Agro from Swandono Adijanto for 4.20 million rupiah, it said.
PT Bumiraya Utama is controlled by the Adijanto siblings, which includes Suparno Adijanto. Swanson Adijanto is a brother of Global Palm Resources’ executive chairman and CEO, Suparno Adijanto, and father of the company’s executive director and chief operating officer, Ivan Swandono, the filing said.
PT Bumiraya Utama will retain ownership of the remaining shares of Bumi Raya Agro, it said.
Global Palm Resources said the ability to increase its land bank for development into oil palm plantations was necessary to sustaining the company’s growth in the long term.
The proposed acquisition “will enable the group to expand its sources of revenue and its current business operations, including the group’s geographical coverage in Kalimantan and overall rate of production of fresh palm fruit bunches,” it said.
Bumi Raya Agro holds a location permit to around 10,100 ha of oil palm plantation, but it hasn’t yet begun production or sale of crude palm oil or palm kernels, the filing said.
The deal is conditional on Bumi Raya Agro’s corporate approval, required government approvals, due diligence and certain other approvals, the filing said.