PETALING JAYA: Genting Plantations Bhd’s 73.685% indirect subsidiary Palmindo Holdings Pte Ltd has entered into agreements with Green Palm Capital Corp (GPCC) for the acquisition of Cahaya Agro Abadi Pte Ltd (CAA) and Palm Capital Investment Pte Ltd (PCI) for US$42.15 million (RM173.26 million), in a related party deal. GPCC is owned by the Sepanjang Group, which is also a major shareholder in PalmIndo where it owns an effective interest of 26.315%. CAA holds, through its 95.0% owned subsidiary in Indonesia, PT Agro Abadi Cemerlang (PT AAC) the rights to develop 8,095ha of land in Kabupaten Sanggau, Provinsi Kalimantan Barat, Indonesia into an oil palm plantation. PCI holds, through its 95.0% owned subsidiary in Indonesia, PT Palma Agro Lestari Jaya (PT PALJ) the rights to develop 13,900ha of land in Kabupaten Sintang, Provinsi Kalimantan Barat, Indonesia into an oil palm plantation. Upon completion of the proposed acquisitions, Genting Plantations will have an effective equity interest of 70% in PT AAC and PT PALJ respectively. “The proposed acquisitions are in line with Genting Plantations’ long-term strategy to increase its interest in the palm oil business, consistent with its confidence in the continued growth prospects of the industry. The proposed acquisitions represents another positive step by the group towards realising its vision of establishing itself as a major player in the industry,” Genting Plantations said in a filing with the stock exchange yesterday. Both PT AAC and PT PALJ’s lands are located within close proximity to Genting Plantations group’s other landbank in Provinsi Kalimantan Barat and presents potential synergies and economies of scale. The proposed acquisitions will increase the group’s combined plantation landbank in Malaysia and Indonesia by 21,995ha from its present 238,376ha to 260,371ha. It will also expedite the group’s upstream expansion in Indonesia as some 3,127ha have already been planted, thus raising the group’s total planted area in Indonesia to 70,829ha (from 67,702ha), an increase of 4.6%. “The proposed acquisitions represent a strategic investment by Genting Plantations, which is expected to contribute positively to the earnings as well as shareholders’ value of the company in the future.” The exercise is expected to be completed in the third quarter of 2016.