Malaysia: Hap Seng eyes majority stake in palm oil firm Kretam for $300m

Visual from Kretam Holdings' website

Malaysian investment holding firm Hap Seng Plantations Holdings Bhd (HSPB) has proposed to acquire a 55 per cent stake in palm oil company Kretam Holdings Bhd for MYR1.18 billion ($300 million).

In a disclosure to Malaysia’s stock exchange, HSPB said it had entered into a conditional share sale agreement with Kretam CEO and controlling shareholder Freddy Lim Nyuk Sang for the acquisition of a 33.5 per cent stake for MYR716.99 million ($183 million).

Lim’s direct shareholding in Kretam will be reduced to 15.3 per cent after the completion of the deal, according to the disclosure.

HSPB has also entered into another conditional share sale agreement with Santraprise Sdn Bhd for the acquisition of another 21.5 per cent in Kretam for MYR460.79 million ($117 million).

“In line with its objective to increase its plantation land bank, the proposed acquisition represents an opportunity for the HSPB Group to pursue its long-term strategy,” Maybank Investment Bank, the principal adviser to HSPB for the proposals, said.

If the deal pushes through, the total plantation land bank and planted area of the HSPB Group is expected to increase by 59.2 per cent or 23,865 hectares and 54.3 per cent or 19,623 hectares, respectively.

With the capacity of Kretam’s existing refinery of about 1,500 metric tonnes per day, the proposed acquisition will also enable HSPB to venture downstream into the production and sale of edible oils and biodiesel, while extending its value chain and operation efficiency, Maybank added.

HSPB is principally involved in investment holding while its subsidiaries are engaged in the cultivation of oil palm and processing of fresh fruit bunches. Hap Seng Plantations is one of the largest producers of sustainable palm oil in Sabah, East Malaysia.

Kretam, on the other hand, is involved in the cultivation of oil palm, milling and sale of oil palm products, refining of palm oil, manufacturing of biofuels as well as manufacturing and sale of fertilisers.

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In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
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