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 F&N 3689  FRASER & NEAVE HOLDINGS BH's subsidiary acquires entire stake in Ladang Permai Damai for RM215.59m cash

KUALA LUMPUR (April 25): Fraser & Neave Holdings Bhd's (F&N) subsidiary has proposed to acquire the entire equity stake in Ladang Permai Damai for a cash consideration of RM215.59 million.

In a Bursa Malaysia filing on Monday (April 25), the beverage company said its indirect 65%-owned subsidiary, Dagang Sejahtera Sdn Bhd (DSSB), entered into a conditional share sale agreement with Dupont & Leosk Enterprises Sdn Bhd and Malaysia Nominees (Tempatan) Sdn Bhd as registered owner of the shares and nominee company of OCBC Bank (Malaysia) Bhd on April 25 for the proposed acquisition.

According to the group, Ladang Permai Damai is principally engaged in the cultivation of oil palm, processing of fresh fruit bunches and marketing of crude palm oil, palm kernel and fresh fruit bunches.

"The business intention for DSSB in acquiring Ladang Permai Damai is for the F&N Group to embark on the upstream fresh milk business for downstream production and distribution of fresh milk.

"It is the intention that after completion of the proposed acquisition, Ladang Permai Damai will lease the Permai Damai Estates to the F&N Group at a fair market rate to carry out operations of the integrated dairy farm and crop plantation.

"The Permai Damai Estates will enable the F&N Group to own a vertical integration business and operations based on locally grown crop for feed to F&N's dairy farm, which in turn will lower the value chain cost per litre," the group said.

This will enable F&N to be less dependent on imported milk and to promote the local agricultural industry, it added.

While F&N owns 65% of DSSB, the company noted that 35% of the issued share capital of DSSB is owned by Dagang Permai Sdn Bhd, a company which is wholly-owned by Raja Perlis Tuanku Syed Sirajuddun ibni Almarhum Tuanku Syed Putra Jamalullail, brother of F&N's chairman and non-independent non-executive director Tengku Syed Badarudin Jamalullail Ibni Almarhum Tuanku Syed Putra Jamalullail.

It noted that the proposed acquisition is deemed a related party transaction by virtue of  Tengku Syed Badarudin Jamalullail's deemed interest of 0.56% in F&N.

"Accordingly, Tengku Syed Badarudin Jamalullail has abstained from all deliberations and voting in respect of the proposed acquisition at the relevant board meetings," F&N noted.

It also added: "For clarification, there is no relationship between the vendor of Ladang Permai Damai and F&N, its directors, major shareholders and their connected persons."

Meanwhile, the company also noted that the proposed acquisition will be funded by internal fundings and/or borrowings.

The group also said that the proposed acquisition is expected to be completed by the third quarter of 2022.

Shares in F&N ended 38 sen or 1.73% lower at RM21.62 on Monday, giving it a market capitalisation of RM7.93 billion.



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