PALM oil producer First Resources has bought, through an indirect subsidiary, plantation assets held by Indonesian palm oil company PT Tri Bakti Sarimas for a cash consideration of 1.9 trillion rupiah (S$162.8 million). 

The assets include mills, plantations and an unplanted land bank spanning around 17,600 hectares in Riau province, Indonesia. The deal was concluded on Dec 28, 2023, via a public auction conducted by the Indonesia government for the execution of mortgage rights held by a bank, said First Resources in a bourse filing on Friday (Jan 5). 

The price tag of 1.9 trillion rupiah was based on the auction’s reserve price set by the bank after taking into consideration the asset’s most recent valuation performed by an independent appraiser, said the company.

It was funded by internal resources and is not expected to have any material impact on the company’s net tangible assets and earnings per share for FY2023. 

“This acquisition not only enhances the company’s operational footprint in the plantation industry but also aligns with its commitment to sustainable and profitable growth,” said First Resources. “The integration of these assets will yield operational synergies and contribute positively to (the company’s) overall performance…enhancing shareholder value.”

Shares of First Resources ended at S$1.44 on Friday, up 0.7 per cent or S$0.01, before the announcement.

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