Carson Group to sell Malaysian, Indonesian plantations

Carson Cumberbatch Group is to sell its Malaysian and Indonesian plantations held via several subsidiaries subject to feasibility and approvals from regulators and shareholders. 

The move was announced by four listed subsidiaries Selinsing, Good Hope, Indo Malay and Shalimar, and Carson said it was part of internal restructuring announced way back in 2009.

The firms have also asked for SEC approval to remain listed without the qualifying minimum public float for a further year from 31 December.

The firms said they own and manage plantation estate in Malaysia and have an investment of 13.33% in Shalimar Developments Sdn Bhd (SDSB) which in turn owns a plantation estate in Indonesia.

The Malaysian plantation estate is fully planted and mature and there are no suitable lands in Malaysia to acquire and expand current operations to generate economies of scale and enhance returns. The rapid urbanisation in the Selangor region of Malaysia and large scale industrial developments taking place in surrounding locations near the plantation estate now drives the commercial value of the property market.

Carson firms said past three years have seen a slowdown in global economic outlook presenting multiple challenges to the palm oil industry. The global commodities market has witnessed a downturn along with a sharp decline in crude oil prices. Crude palm oil prices too have seen a similar trend with prices reaching a five year low.

As a result of these volatile macroeconomic and industry conditions, returns for shareholders of the firms have gradually declined over the past four years as already indicated in Annual Report of the companies.

The firms said that subject to further ongoing feasibility studies currently being carried out, and if deemed to be feasible, obtain necessary approvals from relevant regulators and shareholders for the following: 

a) Sale of plantation estate in Malaysia and distribute proceeds thereof to the shareholders

b) Make arrangements for Goodhope Asia Holdings Ltd., to acquire the investment of 13.33% made in SDSB and the sale proceeds thereof to be distributed to shareholders.

Market capitalisation of the companies is greater than the net asset value as at 30 September 2015. The commercial value received from companies’ reputed independent valuer (Wan Malik) for Malaysian plantation estates is around Malaysian Ringit 84.5 million (nearly Rs. 3 billion). The companies are awaiting further valuation from another reputed valuer.

Further, based on the fair value accounting standards, the investment in SDSB by the companies as stated in Annual Reports as at 31 March 2015 is reflected close to its current market value and the companies do not expect a significant deviation from the same (which indicates a per hectare value of $ 13,000 on a net planted basis including infrastructure).

Directors believe it will take a minimum 24 months to complete the measures proposed as they would entail selection of buyers, evaluation of competitive bids and obtaining the necessary regulatory and shareholder approvals.

Therefore the four companies have sought permission from the SEC to maintain a public holding below the specified levels for an additional period of 24 months from the deadline of 31 December 2015.

SEC rules require listed firms to have minimum of 15% public float with 500 shareholders.

Goodhope Asia Holdings (GAHL) with connected parties own 94.5% in Good Hope Plc., and public float is only 5.48% as at 30 November 2015. GAHL holds 90.78% stake in Indo Malay Plc and public float is 9.2%. In Selinsing Plc, GAHL holds 96.21% with 3.78% of public float. In Shalimar, GAHL holds 99.27% and public float is 0.73%