First Resources unit signs deal for US$329 million stake in Indonesia-listed Austindo Nusantara Jaya
Upon completion of proposed acquisition, its subsidiary will own 91.2% of the oil palm company and will have to make mandatory offer for remaining shares
[SINGAPORE] First Resources’ majority-owned subsidiary Ciliandra Perkasa on Tuesday (Mar 18) entered a conditional shares purchase agreement to buy 3.1 billion shares or 91.2 per cent of the issued and paid-up capital of Austindo Nusantara Jaya for US$329.8 million.
The target company is listed on the Indonesia Stock Exchange (IDX), and is primarily engaged in the business of oil palm plantation.
It is also a holding company for various operating subsidiaries in the production and sale of palm oil and other sustainable food crops, as well as renewable energy.
First Resources noted that the proposed acquisition presents an opportunity for the group to expand its upstream oil palm plantation footprint and enhance feedstock availability for its growing downstream operations.
It will be funded by financing arrangements which the group will enter into with third parties.
Following the acquisition, the group’s planted area will increase by about 25 per cent, and its crop yield will also rise by 25 per cent to 1.25 million tonnes.
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This increase will enhance the certainty and reliability of feedstock supply to the group’s 1.35 million tonnes of refining and processing capacity, further solidifying its position as an integrated palm oil player, it added.
The proposed acquisition aligns with the group’s long-term strategy to be an integrated plantation player with processing capabilities that add value to its upstream produce, ensuring sustainable growth and profitability.
Upon completion of the proposed acquisition, Ciliandra Perkasa will be obliged to conduct a mandatory tender offer to purchase the remaining 296.2 million shares, or about 8.8 per cent of the issued and paid-up capital of the target company.
The offer price per remaining share is the higher of the average of the highest daily trading price of the shares of Austindo Nusantara Jaya on IDX during the 90 days prior to the acquisition announcement, or the acquisition price paid by Ciliandra Perkasa.
Shares of First Resources ended Monday 1.2 per cent or S$0.02 higher at S$1.68.
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