9/4/2018 – India’s largest manufacturer of writing and printing paper has recently forged an agreement to sell its Malaysian unit Sabah Forest Industries to Pelangi Prestasi Sdn Bhd for MYR1.2 billion (about US$310 million).
The agreement was signed on Wednesday, April 4th, and involves Sabah Forest’s entire assets including the procurement of fresh timber licenses from the state’s government of Sabah.
According to Ballarpur, the buyer has already deposited 10 percent of the total consideration in cash while still awaiting the necessary corporate and regulatory approvals, including appropriate court orders of the High Court of Sabah & Sarawak, Malaysia.
Pelangi Prestasi is a unit of Albukhary Group which operates in banking, seaport, e-commerce, construction, engineering, book retail, sugar, palm oil plantations, and airport management sectors.
Sabah Forest Industries is one of Malaysia’s largest timber growers and wood processors. It manages a forest estate totaling 288,000 hectares, pulp and paper manufacturing facilities, as well as an integrated timber complex consisting of a sawmill and a veneer and plywood factory.
Ballarpur acquired Sabah Forest in 2007 for US$261 million, making the first overseas acquisition by an Indian paper company. It began its attempts to sell its Malaysian forest unit in 2016 with Pandawa Sakti but the deal did not push through.
Ballarpur is part of the Avantha Group, which is one of India’s leading business conglomerates with interests in diverse sectors including power transmission and distribution equipment and services, paper and pulp, energy and infrastructure, food processing, forestry, chemicals, ITs, and ITeS.
Shares of Ballarpur Industries increased to 12 percent intraday Friday as the company was going to sell Sabah Forest Industries Sdn Bhd.
This news is published on Reuters.