Last updated Monday, December 05, 2016 8:20 am GMT+8

Wednesday October 19, 2016
10:22 PM GMT+8

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KUALA LUMPUR, Oct 19 — Timber and sustainable forest management group Priceworth International Bhd’s (PWI) Singapore unit, GSR Pte Ltd (GSR), has acquired timber extraction and replanting rights on a forest reserve area comprising 101,161 hectares in Trus Madi, Sabah for RM260 million.

GSR had signed an agreement to acquire the entire paid-up share capital of Rumpun Capaian Sdn Bhd from Transkripsi Pintar Sdn Bhd for RM260 million, it said in a filing to Bursa Malaysia.

Rumpun owns 99.9 per cent of Anika Desiran Sdn Bhd (ADSB), which was awarded a 100-year licence in 1997 over an area known as Forest Management Unit 5 (FMU5) located in Trus Madi.

PWI said the area, which is expected to yield some 6.5 million cubic metres of renewable timber over the next 81 years, will result in a sustainable supply of timber for the optimisation of the currently underutilised logging equipment and wood processing facilities of the PWI Group.

In a separate statement, PWI said the acquisition is a game changer, as it currently uses only 40 per cent of its capacity due to a shortage of sustainably sourced logs.

“This acquisition will allow it to push its utilisation to 90 per cent of its capacity. Furthermore, it will make Priceworth the only integrated timber company in Sabah and among the top five in the country.

“The FMU5 acquisition represents a strategic opportunity to transform the group into a significant fully integrated player with its own entire value chain comprising upstream and downstream assets,” it said.

Funding for the proposed acquisition will be via a private placement, a special issue and initial public offering proceeds or cash from internally generated funds and borrowings.

The company is also planning to raise funds via a proposed merger of its subsidiary GSR with FMU5 for a proposed listing on the Singapore Exchange. — Bernama

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