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Malaysian Felda acquires 37 percent of Rajawali's Eagle High
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An aerial picture of an oil palm plantation in Dumai, Riau. (Antara Photo/Rony Muharrman)
M
alaysian Felda Investment Corporation (FIC) Properties Sdn Bhd, a special purpose vehicle of the Federal Land Development Authority (Felda), has acquired 37 percent of the shares of PT Eagle High Plantation, owned by Peter Sondakh's Rajawali Group.
"We hope this partnership will further cement stronger bilateral ties between Malaysia and Indonesia to move forward the agenda of the recently established Council of Palm Oil Producing Countries (CPOPC), of which both countries are founding members," Rajawali Group managing director Satrio Tjai said in a statement on Thursday.
Eagle High is one of the largest oil palm plantations in Indonesia. It has a 320,000-hectare land bank, which is about 4.4 times the size of Singapore. Of that, 125,000 hectares have already been planted.
(Read also: Eagle Plantations aims for better CPO sales in 2016)
Previously, Felda announced that the acquisition cost was about US$505.4 million. According to The Star, half of the money would be financed through a loan from a European banking group, while FELDA would raise sukuk for the remainder.
The acquisition plan was actually announced in 2015. However, the negotiations took a long time because of price issues. The two companies finally signed a purchase agreement on Dec. 23, 2016.
Meanwhile, Eagle High's performance is actually decreasing. It booked a Rp 391 billion net loss in 2016, an increase by 116 percent compared to a Rp 181.4 billion net loss in 2015. The loss was caused by a 39 percent year-on-year increase in interest expenses to Rp 648.78 billion, while company's revenues decreased by 5 percent to Rp 2.54 trillion. (bbn)
