Priceworth to acquire Sabah timber firm for RM260m

PETALING JAYA: Priceworth International Bhd is acquiring the entire stake in Rumpun Capaian Sdn Bhd for RM260 million to put the group in a significantly more profitable financial position.
Priceworth is also looking to float wholly owned subsidiary GSR Pte Ltd on the Singapore exchange as part of the funding exercise for the acquisition.
In a filing with Bursa Malaysia, Priceworth said the acquisition will enable it to access a significant 100-year concession of 101,161ha of forest management unit in Trus Madi, Sabah, known as FMU5 with timber-harvesting and replanting rights.
Concurrently, Priceworth’s wholly owned subsidiary Sinora Sdn Bhd has also entered into a log extraction and timber sale agreement with Rumpun’s 99.99%-owned subsidiary Anika Desiran Sdn Bhd, to allow it to extract and remove at the contractor’s own cost, all commercial logs and/or merchantable timber within the area.
Priceworth also proposes the acquisition of Sinora by GSR at net asset value.
Besides the proposed listing exercise, other funding plans include a private placement of up to 10% of existing issued and paid-up capital, special issue of 141.25 million shares, renounceable two-call two-for-one rights issue of up to 1.69 billion new shares with one bonus share for every two rights shares subscribed.
The stock shot up 4% or half a sen in the morning session of trading prior to its suspension pending the announcement yesterday. The stock closed 13 sen, with 9.94 million shares changing hands.