Java selling plantations unit to Fima Corp for RM5.2 million cash

PETALING JAYA: Java Bhd is disposing of its entire stake in Java Plantations Sdn Bhd to FCB Plantation Holdings Sdn Bhd, a wholly owned subsidiary of Fima Corporation Bhd, for RM5.2 million in cash.

In a filing with Bursa Malaysia, Java’s board of directors said it entered into a sale and purchase agreement with FCB Plantation last Friday in relation to the disposal of its 100% stake.

The proposed disposal will allow Java, which is involved in the oil palm business, to unlock and realise its investments and help repay its liabilities as well as regularise its financial condition.

The disposal could see Java netting RM4.12 million after deducting the net book value of Java Plantations of RM1.07 million as at Dec 31, 2016.

Java plans to deploy RM1.2 million from the proceeds for working capital, while RM3.5 million has been earmarked for the payment of trade and other payable comprising trade payable, statutory liabilities and other payables amounting to RM8.59 million. A sum of RM500,000 will be used to foot expenses related to the proposed disposal.

In a separate filing, Fima Corp said the acquisition will allow it to realise its strategy to expand its plantation business, particularly in Malaysia, and capitalise on the bright prospects of the palm oil industry, which in turn, would provide a broader earnings base for Fima Corp.

Fima Corp’s main growth driver has been its wholly owned subsidiary, Percetakan Keselamatan Nasional Sdn Bhd, which contributes substantially to its revenue and profitability via its security and confidential documents businesses.