Malaysia’s oldest conglomerate Sime Darby Bhd is looking to raise some MYR1.8 billion ($430 million) in net proceeds by monetising real estate assets in Australia and Singapore, to pare down debt.
The world’s largest listed palm oil planter by land size, is considering the sale of commercial and industrial properties in the two markets.
The conglomerate is expected to reap a gain of MYR1.5 billion from the exercise, which is slated for completion in March.
“In Australia, we have 13 properties and in Singapore we have three. We are looking at disposing of office buildings and industrial properties in the two countries. We will do a sale and leaseback,” executive chairman Mohd Bakke Salleh told local reporters in a media conference on Wednesday.
With this asset monetisation and its previously announced perpetual sukuk (Islamic bond) issuance to raise up to MYR3 billion, Sime Darby’s gearing will be reduced to 54 per cent by the end of the financial year ending June 30, 2016, from 61 per cent currently, Salleh noted.
He also commented that the group has not yet considered any plans for cash call in the near term to further reduce its gearing level.
On potential mergers and acquisitions, Salleh was quoted that the group will look to maximise organic growth, that is, focusing on getting more out of its existing investments rather than actively pursuing new acquisitions.
“Right now we are trying to get more out of our assets. So no thoughts on new assets are to be injected into our group for now,” he commented.
Following up on the group’s deferred listing plans for its automotive arm Sime Darby Motors, Salleh said the group has no initial public offering (IPO) plans in the current financial year.
Sime Darby, which had initially aimed for the listing in 2015, had put those plans on hold indefinitely since February last year, citing unfavourable market environment.
Salleh confirmed that the group is not mulling over an IPO, “at least until the end of our (current) financial year”.