FGV financing DAP leaders

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The current business story about FELDA Global Ventures Holdings Bhd. (FGV) is the story of taking over Pontian United Plantations Bhd. (Pontian Plantations)  is actually more than what meets the eye. The proposed deal eventually be about the FELDA business and investment enticing and arming DAP leaders with a huge amount of cash if the deal goes through.

The Malaysian Reserve story on the proposed acquisition.

FGVH to buy RM1.2b Sabah plantation

Friday, 19 July 2013 10:06 Azli Jamil 0 Comments
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Cash-rich Felda Global Ventures Holdings Bhd (FGVH) is proposing to spend up to RM1.21 billion to buy an unlisted firm that has 40,000 acres of palm oil plantation mostly in Sabah, just less than two weeks after it purchased an RM44 million upstream acquisition of 21,037ha in Kalimantan Barat, Indonesia.

The deal is to be done through a voluntary conditional takeover offer of all the voting shares of RM1 each in Pontian Plantations United Bhd for RM140 per offer share.

This is in line with FGVH plans to further expand its oil palm plantations as reported earlier in the local exchange.

In a related announcement to the exchange yesterday, plantation company TSH Resources Bhd is selling its entire 16.17% interests in Pontian to FGVH for RM195.8 million cash. The sale will result in a gain of RM86.4 million to TSH Resources.

TSH Resources, which owns Pontian via its indirect wholly owned subsidiary Bisa Jaya Sdn Bhd, joins a few other shareholders who have given irrevocable undertakings to sell their shares to FGVH, totaling about two million shares or 23.81%, leaving about 6.6 million shares or 76.19% to be acquired by FGVH via this offer.

Last year in June, TSH Resources made an offer of RM90 per share for the 6.94 million shares or 80.28% of Pontian share it did not own, for a total deal value of RM625 million.

The deal fell through following the expiry of the offer’s closing date where TSH Resources had only managed to increase its shareholdings from 8% to 20.2%.

The offer price by TSH Resources of RM90 a share represented a price earnings (PE) multiple of 14.49 times while the current offer by FGVH of RM140 per share represents a PE multiple of 21.8 times based on the average earnings per share of Pontian of RM6.43 for the past two financial years ended Dec 31, 2011, and 2012.

FGVH said this acquisition will be funded via internally generated funds, proceeds raised from FGVH’s initial public offering (IPO) and/or bank borrowings.

According to FGVH’s statement to the exchange, the offer is expected to be completed by the fourth-quarter of 2013 and is conditional on it holding more than 50% of Pontian shares as at the offer’s closing date which will be set in the future.

FGVH raised RM4.46 billion in its 2012 IPO and as at the last report, RM3.85 billion remained of the money.
Corporate Malaysia

******************

There are several interesting bits about this proposed corporate maneuvre.

As a start, it is a super-premium acquisition. FGV is paying a hell of sum of money amounting up to RM 1.2 billion, not to mention the premium that goes with that for the entire corporate exercise. The first tranche is RM 195 million for 23.81% of Pontian Plantations which is currently held by TSH Resources Bhd.

Analysts are mixed over the RM 1.2 billion price tag offered by FGV for Pontian Plantations acquisition proposal. RHB Research Institute Sdn Bhd thinks the price is too steep. The valuation seems high based on Pontian Plantations’ 2011 and 2012 net profits of RM 71.7 million and RM 39.5 million, respectively, translating into price-earnings (PE) ratios of 16.9 times for 2011 and 30.7 times for 2012, RHB Research noted. “More importantly, its landbank is priced at RM74,765 per ha, which looks expensive, even higher than the valuation. RM140 per share translates to approx RM1.2 Billion cash consideration”.

Fr the Pontian Plantations website: Chairman Dr Chen Man Hin playing his role as a corporate leader

Fr the Pontian Plantations website: Chairman Dr Chen Man Hin playing his role as a corporate leader

TSH Resources had a prickly boardroom experience in Pontian Plantations, where they don’t have majority power. They tried to take over the rest of Pontian Plantations for RM 90.00 per share, which is 14.5 PE exactly a year ago but failed. DAP Adviser for Life, founder and former Chairman Dr. Chen Man Hin and sons control majority of the remaining of the 65.6% of Pontian Plantations and the BOD, refused to this TSH Resources offer.

From Pontian Plantations website: Chairman Dr Chen Man Hin dontating PCs

From Pontian Plantations website: Chairman Dr Chen Man Hin dontating PCs

Another interesting fact is that when TSH Resources offered to take over Pontian Plantations last year, the CPO was at RM 3,200 per ton. The current proposed offer of RM 140 per share today is at the point where the CPO price is RM 2,300 per ton.

The Star report on TSH Resources attempt to take control of Pontian Plantations a year ago:

Thursday June 28, 2012

TSH proposes merger with Pontian United Plantations

BY WONG WEI-SHEN
WEISHEN.WONG@THESTAR.COM.MY

Chairman says move will ignite synergistic growth

KUALA LUMPUR: TSH Resources Bhd hopes to create more value via economies of scale through integrating with Pontian United Plantations Bhd (PUPB), a public but unlisted plantation firm.

In filings with Bursa Malaysia on June 26, TSH announced a proposed acquisition of PUPB’s entire voting shares of RM1 each via its indirect wholly-owned subsidiary, Bisa Jaya Sdn Bhd (BJSB), together with Chin Leong Thye Sdn Bhd, Lee Chin Hwa, Lee Min Huat and Lee Sep Pian.

“Our intention for the merger is to create more value. We can have better economies of scale and can benefit from creating value together,” chairman Datuk Kelvin Tan told reporters yesterday.

Both TSH and PUPB plantation fields have been neighbours since the 1990s, sharing the same access road in Lahad Datu, Sabah.

Tan said the benefits of the merger included economies of scale in both companies’ supply chains, logistics, distributions, finance and employee training.

Most of PUPB’s plantations have matured, while 73% of TSH’s plantations are immature. Furthermore, TSH has a landbank size of 70,000 ha for future planting. “PUPB can ride on the growth that we will have,” Tan said.

PUPB would also be able to reap benefits from TSH’s biotech Wakuba high-yield clone, a technology developed by TSH’s biotech centre in Sabah. The Wakuba ramets can produce around eight to 10 tonnes per hectare of palm oil yield, compared with the current industry average of four to six tonnes.

The merger will allow both TSH and PUPB to increase planted plantation landbank size and eventually lead to a higher fresh fruit bunch output.

To enable the integration of both companies, TSH needs to obtain a 50% plus one share stake in PUPB. Currently, TSH and the joint offerors hold 1.71 million shares in PUPB, representing a 19.72% stake. Through BJSB, TSH has been a shareholder of PUPB since 2005.

TSH is offering RM90 for each PUPB share, which will come in two segments. The first of which will be satisfied through RM45.06 in cash and RM44.94 via the issuance of 21 TSH shares. This offer price is 2.25 times the last known transacted price six months ago of PUPB at RM40.

The issuance of TSH shares represents the ordinary shares of 50 sen each, issued at a price of RM2.14 per TSH share, a 10% discount to the five-day volume weighted average market price of TSH shares up to and including June 25.

The remaining 80% stake in PUPB not already owned by TSH and the joint offerors, via the offer was valued at RM624mil. This was at least 14.6 times the price earnings ratio, based on the past three-year net profit average. The 100% valuation of the company currently stands at RM780mil. TSH expects to deliver the offer document to PUPB in three weeks.

However, PUPB will continue to operate as a separate legal entity following the merger.

***********

Obviously these Chinese businessmen failed to sort out their own affairs on the own.

What is FGV supposed to do absolving Kelvin Tan from his duties and commitments in BOD of Pontian Plantations by taking up all of the 23.8% holding but without BOD and management control?

DAP founder and Adviser for Life Dr Chan Man Hin giving a speech as Pontian United Plantations Bhd. Chairman

DAP founder and Adviser for Life Dr Chan Man Hin giving a speech as Pontian United Plantations Bhd. Chairman

So, the game now is for FGV to take over Chinese Chauvinist Dr. Chen Man Hin and sons’ holding for RM 140 per share at 31 PE, which translate to about RM 200,000 per acre and an eventual princely sum of RM 1.2 billion. That is exorbitantly over-priced, by any counts for a plantation.

The “Thirteen Million Plus Ringgit” question is; What if  Dr Chen Man Hin and sons turn down the RM 140 per share of Pontian Plantations?

Chairman and Management of Pontian United Plantations Bhd.

Chairman and Management of Pontian United Plantations Bhd.

After all, most of Pontian Plantations are 999 years lease. Then, FGV must up its own offer, which may above the current RM 185,00 per acre already on the table. Otherwise, they are stuck with just the 23.8% bit acquired from TSH Resources.

FGV’s 23.8% investment in FGV would be of limited worth since Pontian Plantations is under the control of Dr Chen and his sons. The exercise would just alleviate Kelvin Tan from his own financial predicaments.

Tan Sri Isa Samad and Emir Mavani

Tan Sri Isa Samad and Emir Mavani

Then again the subsequent question would be whether FGV invest more money on consultants, to do a more comprehensive analysis on the project and come up with a more enticing proposal for the acquisition. After all, FGV CEO Emir Mavani (p.k.a. Pradeeb Kumar), Chief Strategy Officer Dr Suzana Idayuwati Osman and the planter-wannabe PEMANDUettes already commissioned some consultants to a sum of RM 1.5 million for this Pontian Plantations acquisition.

This consultancy expenditure for FGV is despite having a stream of PEMANDUettes Mavani brought in and placed them as General Managers all over strategic posts within FGV.

In short, this corporate maneuvre is about a GLC enticing the Chinese with more goodies and this time is with a princely amount of money. The irony is the benefactors are Chinese Chauvinists who are out to destroy entities that are supposed to look after the Malay interest, such as FELDA.

The supplementary “Thirteen Million Plus Ringgit” question is; What is FGV Chairman YB Tan Sri Isa Samad doing about this Pontian Plantations acquisition?

It is unfortunate that the public opinion especially amongst the Malays would eventually have a negative perception on FGV if this acquisition goes through. It is on top of the fact that Isa pushed so hard to have a Non Malay without any relevant plantations experience be placed to replace Tan Sri Sabri Ahmad as FGV CEO.

Will Isa Samad stick to be "honest and truthful", which include the New Britian deal?

Will Isa Samad stick to be “factual and truthful”, which include the New Britian deal?

The fact is that no planter would ever want to pay almost RM 200,000 per acre in Sabah. So is the 11,500has New Britain deal, in Papua New Guinea. The simplest question that would cross the minds of many, especially the 112,635 FELDA setllers and their families, “Just because FGV have a lot of cash, they simply buy anything at any ridiculous price?”.

If FGV were to buy out most of Dr Chen Man Hin and sons’ holding in Pontian Plantations, especially at RM 140 per share then it would be seen as Isa ‘financing’ the DAP founder and Adviser for Life. Erosion of confidence on Isa, would be the least of Prime Minister Dato’ Sri Mohd. Najib Tun Razak’s problems when it comes to FELDA and the voters in the 54 Parliamentary constituencies where 114 schemes are located.

*Updated 1000hrs

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Published in: on July 21, 2013 at 03:00  Comments (65)  

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  1. What the hell man?

    Seriously, what the hell!!

    So much bullshit with UMNO politicians nowadays!

    Do Chinese have you people on strings or what?!

    And what’s with that fake PhD guy still having the position, no more qualified and experienced Malays you could hire?!

    • Replace Najib. So long as he remains as UMNO President/PM, such things will continue. UMNO not fighting for and looking after the interests of the Malays. He is still looking after the interests of the others even after Chinese tsunami.

      • Najib said UMNO should change. Yes, UMNO should change i.e change its President to a true blue UMNO leader who is not afraid or hesitant to berjuang utk agama, bangsa dan negara. The struggle along this path will remain the core objective and agenda of Malays. Some detractors will try to belittle this struggle and want the Malay political power and economic standing to be as diluted as possible. This is done by teaching the Malays to be as liberal as possible and to cast away Malay special position by teaching Malays about meritocracy and how bad it is to benefit from affirmative action. Malays are being constantly brainwashed by liberals that if they defend their special position then they are ultras or racists. The game of diminishing Malay power is being played and many liberal Malays are having fun playing it together with the liberal detractors.

    • what the hell. This is called sleeping with the enemy or the song ‘One for you, Two for me ‘. The Singaporean Trojan Horse DAP has failed to deliver a conquered Malaysia to the brilliant Lee Kuan Yew with his 9 failed Policies for Singapore to save his legacy since 1966 in 3 EASY STEPS, 1997, 2008, 2013. Their intellect is way below that of Lee Kuan Yew. This is why they spent 47 long years since 1966 doing nothing for the Malays, the Chinese, the Indians and all. And from 2008, the DAP was all sound and fury and misled the Chinese to create THE CHINESE DILEMMA.

  2. Gosh!

    This is a moral case against the Felda settlers & a political ‘crime’ against UMNO.

    IF PM Najib dont act on this fast, then he too is abetting the same despicable acts against the Malays.

    Make no mistake about that!

    In the mean time, UMNO members & leaders must be bold enough to be heard. Too much at stake in this one single act of ‘political’ crime!

    • Being heard is one thing, taking action is another.

      The power rests with UMNO members – specifically, the delegates to PAU. Acting collectively.

      If they want to be heard, there is no reason why they should not vote Najib out. Don’t wait for Tun Dr Mahathir or others to give the cue. Things are so bad that surely they see the need to remove Najib.

      Many may have been enticed with rewards of one kind or another. The guilty-of-politik-wang UMNO Youth leader and gang must be the conduit, the cengkurik going around canvassing support and making promises. Hence blokes such as MBA tipu Azeeeeeeeez got appointed to Tabung Haji, flagrantly and arrogantly disregarding the grumblings and shouts by many of the rakyat.

      UMNO and the Malays might lose power in the next general elections if Najib continues, as the hanky panky wil go on unabated.

      • UMNO AND THE MALAYS WILL DEFINITELY LOSE POWER IN THE 14TH GENERAL ELECTION IF THE TTP IS SIGNED AND THE HANKY-PANKIES GO ON – THE DEMISE OF THE MALAY WORLD AS WE HAVE KNOWN ALL THESE YEARS – THE PEACE, STABILITY, PROSPERITY. ALL THE BUMIPUTRA AND NON-BUMIPUTRA BUSINESSES WIPE OUT WHICH WERE BUILT UP THE HARD WAY SINCE 1981. The Malay middle income group plus others will be in trouble. Unemployment will shoot up affecting all.

    • Dont worry!

      The bloke who studied industrial econs at Nottingham won’t act against the guilty-for-money-politics chappy.

      Its something to do with Ziana Zain and Port Dickson or some other town in N Sembilan, in a surreal “I know what you did last summer” kind of “Remember when that happened?”.

      Since the takut-bini bloke wont do anything, the rest of MT UMNO would just sit around quiet as a mouse about it and praising the Boss for the sake of “Perpaduan”.

      UMNO ppl got to do a bottom-up wave from the grassroot, of intense force to correct these things. Probably PERKASA would be needed to be drawn in, in full force. After all, last night in Bulletin Utama they spoke against Mr Fake Ph.D in prime time national news.

      • Thank you all.

        Yes, PERKASA did talk about Emir Mavani’s (p.k.a. Pradeeb Kumar) Ph.D in ‘Government Reforms’ from Warnborough University and featured last night in prime time TV3 news.

  3. Sekarang Keling Haram tu nam bagi duit dengan DAP? Apa benda nie? Tak cukup ke kerajaan dah bagi begitu banyak manfaat kepada cina tsunami tu di PRU 13. Duit Peneroka dia bagi pulak. Hancur…. Bail bagi dengan Peneroka. Tak logic lah…..

  4. What? you pay that kind of premium and there is no guarantee of controlling stakes? Must be something they learn at Wombat University (or was it Wonkerburough Uni? can’t remember, cannot find it on Google)

    Corporate exercises (and potentially a financial misappropriation) aside, I would like to ponder upon another issue. When a Chinese chauvinist politician are in possession of so much wealth in this Tanah Melayu nobody even bat an eyelid.

    What if a Malay businessmen or politician are half as wealthy? I bet my bottom money that the first reaction especially from the same bloody chauvinist and their keldai amongst the Malays is to scream Corruption!!! Cronyism!!! Investigate!!!

    Its really disheartening, it appear as if it is a sin for a Malay to be rich in his own land. Look at how vicious they attack Tan Sri Mokhtar Bukhary for being wealthy.

    But then again when you have the likes of Isa Samad and a PM who appoints people with dubious qualification to such position… ohhh well.

    P/S why is this particular Wonkerians is so special to Isa? Anybody?

    • Isa was reported to be at odds with the previous chap. Maybe to him, anything goes.

      I’m not sure if Isa was responsible in getting the Wonker appointed. But Najib certainly was, and is. The buck stops at him. His past acts and omissions seem to suggest his culpability.

      Many people believe the Level Four chaps continue to wield a huge influence on the PM right to this day. E.g Omar Ong. He got appointed to Petronas BOD despite objection by the then CEO. People also believe in a money motive. Question is: money for whom?

      Sure a part of the kitty goes to party funds – damn expensive elections costs these days, both general elections and party elections. But it’s a huge kitty – FGVH, Tabung Haji, what have you. I suspect a lot goes to individual pockets.

      I’m not in the know and sure would like to hear from those who have links with those in the know. Or who can observe from close quarters.

      • Very much!

        Mr guilty-of-money-politics pushed hard for Mr Fake Ph.D. Even to a point of manipulating the board.

        It’s Omar Ong who started Pemandu. So this Mr Fake Ph.D is in right when FGV on the IPO role because of his ‘assignment’.

  5. BD,

    A really interesting story with of course a lot of issues that could be misinterpreted by some.

    Firstly, some have mentioned that “you cannot do” anything with 23.81% stake but that is plain wrong. This is a tactic in engineering a takeover, you first start by building up a position and then you make General Offer for the shares you do not own.

    Let’s first address the valuation of it. As it stands now FGV is offering RM 185,000 per Ha and this has caused some people to be very uneasy with the prospect.

    I look at it and I say – “Wow”. These guys are aggressive. FGV is now flexing its muscles and saying to the rest of corporate Malaysia that under Dr Emir Mavani, well aided by Dr. Suzana Idayu (first time GLC has 2 PhD at the top), that they are ready for business and will go after a target.

    This makes people sit up and watch. No doubt the price looks steep, but this is not Dr Emir or the CF consultants fault. Its because of the current low interest rate environment that means if FGV did not do this deal, what will it earn from its cash holdings? What is the current 1 month BNM Bill rate going for the current FD rate being offered?

    Nothing. Practically nothing. So having all that money and getting nothing from it means that the money is sitting there lazily. Perhaps sleeping like somebody this blog used to whack a lot.

    Money must be made to work. And it must work hard. What other better way than to make money work than going after this acquisition. It makes strategic sense for FGV as the plantations in Sabah can be amalgamated leading to greater “economies of scale” and it also expands FGV presence in Johor, which has been very small compared to their presence in Pahang and NS. And most importantly, there is no burdensome land lease fee to be paid to Felda or any profit sharing, of course given if FGV is successful in this target acquisition.

    This blog mentioned that the price could be as high as RM 200 per share. Get real. This communist will not sell cheaply. RM 220 per share may be the final price needed to get this deal done or about RM 300,000 per ha.

    That would mark a record in terms of price per Ha and will mark really a great accomplishment in being able to liberate Pontian from the clutches of the DAP, as this blog so likes to speak.

    • The Lucifer Lieutenant fr Pemandu is back.

      Pls stop acting. Don’t act surprise. You, the other planter-wannabe minions, Bitchy Witch and Mr Fake Ph.D. are equally together on this.

      Look at your shallow justification. Which desperate idiot would want to pay 31times PE for a plantations co. at average RM 185,000/acre in Sabah?

      The fact is that any blind imbecile could start a plantation in the same neighbourhood for a maximum of RM 15-18,000 per acre from greenfield to fruiting.

      Why on God’s earth FGV would wanna buy off and pay that kind of cash to a DAP founder and stalwart?

      The answer lies who benefitted from this transaction.

      This deal is almost certain there’s some deep and huge hanky panky involved. Considering Mr Fake Ph.D and the guilty-for-mone- politics bloke are very much deep in cahoot with that chap in the investment committee who ‘volunteered’ to negotiate on the PNG deal already once, they would wanna do that again.

      After all with RM 3.85b of cash in the kitty could enable acquisition of so many assets that could bring about more lucrative ventures for them, as the ‘ppl who decide or influence’. Imagine if its just 10% fee.

      No wonder guilty-of-money-politics man wanted so much Mr Fake Ph.D to be in. They are into some forbidden fruits from greedy-land. And the minions from Pemandu are just the Lucifer lieutenants for them to achieve these self-serving part games. Literally.

      • Good of you to call the fellow’s bluff, Mr Ex-AA & Co. Hope you come out more often to help lay persons like me understand and put down the fellow trying to impress or gloss the issue with economic or accounting jargon .

        You know the arguments and the relevant facts in support of them to whack the fler who calls himself a Shadow Banker of I-don’t-know-what. He even said, “first time GLC has 2 PhD at the top”, totally ignoring the fake PhD issue that people have raised, meaning endorsing dishonest people leading such a huge GLC.

        I sense that the prices are ridiculously high but have been unable to counter argue. Now you have put the fler in his proper place.

        Do come in more often, I’d always welcome the arguments you put out.

      • Ex AA & Co.

        I think RM 15k – 18k is the cost to develop a greenfield plantation. What about the cost to acquire the land?

        I think that is why the premium is so high. Land is very expensive these days.

        We must analyse this transaction without emotion and based on the tools of the Corporate Finance trade, namely

        a) Valuation
        b) Justification
        c) Negotiation
        d) Closing
        e) Financing
        f) Integration
        g) Synergy capture

      • “Land is very expensive these days.” -

        Who does the valuation of the land? What other neighbouring or nearby plantation lands have been used for comparison purposes?

        How independent is the valuation company used? Did FGV use valuation agents appointed by them and what kind of discussions or consultations took place between the Valuers?

    • Hahahhahahahaha… monyet pemandu nie betul betul bodoh. You know what kinda damage PKR/DAP can do in Sabah with that money. The plantations locate in Sabah. You are fundings their political funds. Like that all assembly men in Sabah jumps to PKR. 1.2 Billion and now you thinks can go up to 1.6 Billion just to free the company from DAP. Idiot… what happens if you get 65%… you have hostile minority shareholder. Everything jam. Sum more how you can make an acceptable return on the investment if you pays too high. Also there is no other plantations you can buy but this? There so many others available. Stupid pemandu. Talk nonsense.

  6. Baghal datang dari kandang mana yg buat cadangan ultra-banggang cegini?

    Tahun lepas Kelvin Tan nak beli dari Cina Kominis ni dgn harga RM625j. Gagal. Cina dgn Cina pun tak jalan. Ni pulak Melayu. Gomen palk lagi tu!

    Pas tu ada lak Keling Penipu + Melayu yg Umnonya kena gantung pergi pulak sua Cina DAP ni duit Gomen dgn cash RM1b. Buta buta la Cina DAP ni akan tarik harga gila gila lagi ada!

    Untung tahun lepas RM40j ja. Dah masuk 3 generasi pun lom tentu dah pulang modal.

    Ni sama cam adegan dlm Seniman Bujang Lapok, “Ni mak-bapak ko punya pasal! Aku tak da duit. Aku hutang sama ceti. Anak dah berderet pun hutang ceti lom habis lagi!”

  7. Justification 1 – CPO remains at present

    Scenario A – Price at RM 2,250
    Price RM 185,000 /Ha
    Yield Per Ha / Yr – FFB 25 MT
    CPO Yield 25%
    Palm Kernel Yield 5%
    Price CPO (RM /tonne) 2,250
    Price CPKO ( RM /tonne) 2,700.0
    Proceeds Per Ha
    CPO (RM per Ha per Yr) 14,063
    CPKO (RM per Ha per Yr) 3,375
    17,438
    Cost Per Ha
    FFB production cost (RM/tonne) 280
    Oil Mill Cost 100
    380
    x Production Vol (25 MT) x 25 MT
    Total Cost (per Ha Per Yr) 9,500
    Gross proceeds per yr 7,938
    Payback period ( ÷ by RM 185 k / ha) 23.3
    Gross Yield ( % ) 4.3%

    • Idiot Shadow bankers. U sekarang pandai pakai cost per hectare. U cakap cost per ton lagi penting. You please bagi tau mana plantation ada yield 25 ton ffb per ha average. Stupid. Jadi Pontian tidak payah replant ke? Pokok dia sudah 18 tahun lebih. Bodoh. Siapa dapat OER 25%. Pemandu making up numbers lagi. Tolong lah… pergi belajar dulu bodoh.

      • Looks like he’ll be Shadow Banker forever!

        Or he is banking on shadows, not realities.

      • I think the information you have is in accurate.

        Under the newer strain DvP II stock, yields per Ha can consistently reach above 25 tons per Ha.

        Secondly, trees with the average age of 18 years still have about 5 to six years of good production capacity before the replanting cycle. This is immediately earnings accretive to the shareholder, boosting Earnings Per Share (EPS) and, if the Price Earnings Ratio (PER) is maintained at 21 x, this means every additional 1 sen earnings can boost the share price by 21 sen. So if earnings rise by 10 sen, then the share price will rise by RM 2.10.

        Business must be concerned about the shareholder returns, not political issues.

        The final point is that the per Ha calculation was used because we are acquiring the substantial assets of Pontian, which is land. That is the economic factor acquired i.e. an investment decision. But when looking at profitability, we look at operations, which is revenue – cost. Here, per ton basis model is more appropriate. That is why we require consultants to help us navigate these complex issues.

      • Can you quote the authority and reliable links for us to check

        1. your statement “the newer strain DvP II stock, yields per Ha can consistently reach above 25 tons per Ha.”?

        2. and the authority and links showing the 18 years old Pontian trees are of that strain.

      • The info on DvP II is common knowledge in the industry. But you need to understand Oil Palm business first.

        On the second point, we are looking at the “value in use” – that means how much is Pontian valued to FGV. So whether or not the trees in Pontian are planted with DxP II or not is immaterial, because we will plant it with the new stock when the replanting cycle is up.

        This is corporate life. Mergers, acquisition and meritocracy. Since this blog supported the listing of FGV so vehemently when other more illustrious blogs like the Pirates of Putrajaya, had hammered the issue down, then it sounds hypocritical to attack what is a purely corporate matter.

        He he hee

      • Boy oh boy, how stupid can you be.

        Lokee here, man, you are talking in a blog, not in a forum of plantations people. You say what appears to be shit in a blog of varied participants, you surely need to explain when asked, not just say “need to understand Oil Palm business first” kind of shit. You are sounding DAP Red Beanish more and more.

        You try to intimidate your detractors by stupid comments like “DvP II is common knowledge in the industry.” Why the hell do you come into here if you are not willing to explain or justify your statements that have been disputed? You don’t have the facts, the reliable links, do you? You just copied from somewhere what you put out, eh?

        And what “whether or not the trees in Pontian are planted with DxP II or not is immaterial, because we will plant it with the new stock when the replanting cycle is up” are you talking about, when your figures are based on that new strain with the 25MT yield/ ha/ yr?.

        No, This is NOT “corporate life. Mergers, acquisition and meritocracy”. This is highway robbery, deceits, manipulations and sheer glossing of figures that we are talking about in this blog post, done by a fake PhD holder with others having doubtful intentions, sincerity and integrity, including you, a banker wannabe but appearing as a spinning bee. Calculating on the basis of 25MT yield/ ha/ yr for the present purchase of 18 year old trees and then saying immaterial whether Pontian is planted with the said new strain.

        You don’t even realize that “this blog supported the listing of FGV so vehemently” is different from FGV having a dishonest bloke as CEO that is the focal point of the discussions in here in the several posts concerned?

        Chiissh.

    • Scenario A – CPO Price at RM 3,250
      Price per Ha RM 185,000 /Ha
      Yield Per Ha / Yr – FFB 25 MT
      CPO Yield (% per ton FFB) 25%
      Palm Kernel Yield 5%
      Price CPO (RM /tonne) 3,250
      Price CPKO ( RM /tonne) 3,900
      Proceeds Per Ha
      CPO (RM per Ha per Yr) RM 20,313 per Ha per Yr
      CPKO (RM per Ha per Yr) RM 4,875 per Ha per Yr
      RM 25,188 per Ha per Yr
      Cost Per Ha
      FFB production cost (RM/tonne) RM 280 /tonne (Estate cost)
      Oil Mill Cost RM 100 /tonne (Milling cost allocation)
      Equals RM 380 / tonne
      x Production Vol (25 MT) x 25 MT
      Total Cost (per Ha Per Yr) RM 9,500 per Ha per Yr
      Profit per yr per Ha RM 15,688
      Payback period ( ÷ by RM 185 k / ha) 11.8
      Gross Yield ( % ) 8.5%

      Explanation:
      Under scenario 1, at the price paid of RM 185k/Ha, and assuming CPO prices to remain deflated (worst case situation), the payback period is approximately 23.3 yrs. The Gross Yield of the investment is a healthy 4.3% which is below the ROCE (Return on Capital Employed) of approximately 10%.

      In scenario 2, when prices recover to pre-crisis levels of RM 3,250, the payback period is shortened to 11.8 yrs. This is slightly lower than the required ROCE of 8.5%, but can be made to be higher than the ROE of 10% by the use of leverage.

      Implication:
      FGV has too much cash which causes shareholder ROE to be depressed. Options to increase ROE include
      (a) Acquisition of a synergistic plantation provider
      (b) Acquisition of the 51% of Felda Holdings not under its control
      (c) Acquisition of a related agrobusiness
      (d) Further investment in the logistics supply chain
      (e) Issue a bond.

      Sorry some people may not understand, but this is investment and decision making. I may not be able to understand the finer points on the political process but we must keep Politics Out of Business,(POB) as was mentioned.

      All credit to the consultants with this bold strategy. It will achieve the objective.

      • I agree that this bloke is called stupid.

        He doesn’t even respond to his figure of FFB 25MT/ ha/ yr disputed by Ex-AA & Co.

        Also doesn’t give the name of the consultants. Maybe all PhDs also. Fake ones, too.

        He sounds more like Red Bean than whatever shadow he banks with.

      • We have already responded. Under DvP II, the yield is consistently higher than 25 Mt per Ha. And IOI even has up to 28 Mt per Ha.

      • Eh bodoh shadow banker. Kita tanya mana company dapat yield AVERAGE 25 ton per ha. Not one off yield in a small area you stupid fool. The answer is NONE. Also mana ada Plantation dapat AVERAGE OER 25%. Tipu Tipu Tipu…. bila replanting boleh dapat yield 25 ton lagi? You are a certifiable idiot.

      • Bang.

        Byk orang faham tapi kenapa nak memperbodohkan orang.

        Kan pokok kat estate tue dah tua. 17-18tahun. Lagi 7-8 tahun dah kena tanam semula. Dah masukkan ker kos tanam semula tu.

        Lagipun tak silap saya, ada hidden kos lagi tu bukan setakat kos ladang dan kilang. Kos ibupejabat pun kena share balik antara ladang dan kilang.

        Lagi satu, pelaburan tidak boleh dibuat semata-mata kerana tarikan kewangan yang memberansangkan. Faktor lain perlu diambila kira khususyna faktor politik yang khusus untuk pelaburan ini. Banyak faktor bukan kewangan yang mempengaruhi setiap keputusan. Kalau tidak kenapa Adik Beradik Lehman, Fannie Mae dan Freddie Mac boleh lingkup. Mungkin mereka pun manipulate angka seperti Abang jugak tapi tak mengambil kira risiko bukan kewangan.

        Nasihat saya bang. Bila pergi kerja tu, janganlah sombong , bongkak dan pandang rendah pada rakan sekerja lain. Mungkin rakan sekerja lain tidak dapat peluang seperti Tuan tetapi mereka manusia yang bekerja dengan jujur dan tanpa mereka FGV takkan berdiri gah seperti sekarang ini.

        Hentikan lah dakyah yang tak betul nie. Kita ini kerja demi beribadat bukan keuntungan semata-mata. Ukur baju badan sendiri.

      • The FELDA DxP Yangambi can achieve a mean for oil to bunch of 30.2%. This is equivalent to 25.8% oil extraction rate or OER at the conversion rate of 0.855. The palms have a high bunch number with medium sized bunches. These crosses also produce bigger fruits with thicker mesocarp and less spiky bunches. Mesocarp to fruit content is high.
        src : http://www.feldaholdings.com/content.php?h=3136&lang=EN

      • If its so bloody good, why don’t you monkeys raise cash on your own name buy a plantation, and reap the rewards of your own assumptions + projections + fancy ppx presentations…..

        Instead of gambling cash which is meant for Felda peneroka strategic investments?

        Don’t tell us in Greek, Latin or Sanskrit that with all that mumbo-jumbo that you present as if plantations is such an easy-peasy industry, that you cannot sell your own story to the financiers, to raise cash?

        Cakap tak serupa bikin, ehh…?

      • On July 21, 2013 at 18:49 Shadow Banker said:
        We have already responded.

        Who is “We”? Your office working overtime on a Sunday 7 pm?

      • why issue bond ah? on your point (e)? Can you explain to stupid ppl like me?

    • Hoi!

      Bleeding stupid, aren’t you?

      How many readers of this blog understand Greek, let alone able to communicate in it?

      You’re not even consistent and realistic in your assumptions. How do you calculate returns based on CPO price you Pemandu monkeys want it to be?

      The 25 MT/ha isn’t even a proven and put in commercial practice.

      Tell us, what do Pemandu feed you lot in the labs? Constant dosage of LSD?

      You calculate payback period at current CPO plus assumption of constant FFB prod cost/mill cost/etc and 23 overs is acceptable?

      Bollocks consultants are more like it!

      You moronic monkeys makes arm chair analysis over paper when you hv no shred of operational experience on plantations!

      This is the real deal. This is bonafide plantations operations, played by seasoned planters.

      Not MBA course-work for a two bit half haprak Gaya-Pos school in some obscure shop house in the interiors of the Irish Republic.

      Pls go back to the word-work you ‘mengabihkan boregh’ ppl crawled out from.

      • Or a PhD tipu course – no need to submit a thesis, just an essay of several pages, haha. And claim to know the world.

    • First, the FGV being a plc must have an independent valuation of the plantation. (I have never heard of a RM200,000 per acre plantation, maybe it has also gold etc). Second, at RM200,000 per acre at cost of production of RM1,000 per ton, FGV will probably get back their investment in 100 years time if ever provided there is no mismanagement.

  8. These tests showed that DxP crosses involving the Yangambi pisifera palm ML 161 produces even superior performance. DxP Yangambi ML161 produces an oil yield of 8.89 tonnes per hectare. This is 32% higher than the performance of the standard cross, SC3. DxP Yangambi ML 161 also showed a 28% increase in oil palm yield from DxP Yangambi which produces 6.96** tonnes per hectare. DXP Yangambi ML161 also produces 29% more FFB than DxP Yangambi.

    The superior properties of the DxP Yangambi ML161 crosses make it a premium planting material and it enjoys a high demand in the industry. Since 2002, FAS only uses DxP Yangambi ML161 crosses to produce its commercial oil palm planting materials.

    6.96 tonnes equivalent to approx 27 mt PER HA ffb assuming OER of 25.4%

    • Can you tell us which plantations proven that this is

      1. Commercially workable?
      2. How long hv it been commercially workable?

  9. Tolong bagi tau? Saya dah kerja di ladang 16 tahun. Berkhidmat di FPI sebagai jurutera dan sekarang di Fgvpm. Saya memang suka tinggal di ladang dan kalau boleh anak saya akan juga kerja di bahagian perladangan pada masa hadapan. Setau saya hanya tempat tempat tertentu mendapat yield yang saudara shadow banker cakap tu. Tapi soalan utama saya adalah betul ke ladang Pontian Plantation tu ditanam dengan clone yang canggih tu? Kalau belum, pokok tu tak akan mencapai yield 25 ton sehektar dan OER 25%.

    Kalau boleh janganlah menhina kehidupan kami. Redo lah.

  10. He he he
    Ha ha ha ha ha…

    Oklah… aku admit. Memang deal ni bodoh. Memang tak masuk akal. Budak tadika ke budak darjah satu pun tahu. Kalau aiskrim kat luar jual dua kupang, pasal apa lu nak beli dengan harga seringgit. Tu pun u beli dengan your sworn enemy.

    Itu namanya bangang!

    And number 2, memang tepat no such thing as 25 tan per Ha average yield. Average yield per Ha of the great IOI pun only 20 je. And Ex-AA & Co pun is right on the money. In Pemandu, they can invent any number they want. Kalau return tak nampak hebat, letak je forecasted price of CPO at RM 7,000 per ton. Yield per Ha letak je 30 tan per Ha.

    No hal punya.

    All that I have written before is just the same rubbish that they will use to justify this deal. Memang aku buak lawak giler… In realiti, orang Pemandu tu won’t waste their time to talk in this blog. Dia tak layan pun, dia busy sapu duit FGV utk diberi kepada Cina DAP.

    Ada tak justifikasi? Ia memang ada – Konsultan dapat fee berjuta juta dan broker dapat komisen. Cina DAP dapat wang dan mereka yg berpeluh2 menyokong Najib dapat mengangkat plakard “I love PM”

    Tapi kenapa u nak marah dengan aku?

    Dah bertahun2 aku menyeru UMNO spy menggantikan Najib dengn TSMY tapi diboikot terus oleh blogger blogger elit UMNO. So sekarang aku in exile di tempat lainlah (little red dot) , kadang2 menjenguk blog ni utk tujuan menjadi batu Ronson. Tapi kita kan sini kalau buat bisnes memang canggihlah. Tak kira mat salleh ke bangla ke afrika ke, kita tak kasi chance punya.

    Selagi tiada siapa siapa yang berani nak mencabar Najib, until then deal deal macam ni akan menjadi normal bisness. We have not even talked about 1MDB dimana Goldman Sachs mendapat upah USD 500 million.

    So kesudahannya, hentamlah sejauh mana u nak hentam. Pekik, melolong and do everything . Akhir akhir, Najib dan gengnya akan mengangguk kepala dan jabat tangan dengan Obama. In between Chen Man Hin dapat jadi billionaire.

    SWK @ Pirates of Putrajaya

    NADRI dan VANAKKAM !

    • Kepala bapak kau, Mamat Chin Kupusamy.

      Aku do’akan Singapore di langgar todak, muncung todak tembuskan perut kau yang memboseh, kau lari ke Causeway, aku, Pak Berahim dll tunggu kau di sana, campak kau di tepi pantai, panggil Anwar Al Juburi sula bontot kau dengan buluh tajam, di sorak dek Man Hin. Kit Siang dan Guan Eng.

      Bedebah kau nak cari maki di petang hari puasa. Puasa aku tak batal. Aku ngentam bedebah yang nak merosakkan Melayu yang Islam. Perang di bulan puasa in defence of Islam takpa.

      • VANAKAM banyak2. As I said before, we are all on the same side. Sbnrnya aku mmg nak try join defend geng Pemandu ni, tapi hasrat tak kesampaian. Putar mcm mana pun tak logik dan tak sampai hatilah aku terus nak bermuka2 ni.

        Aku benci dengan mrk yang menipu terang2 menggunakkan hujah2 kewangan. So tak sampai hatilah aku terus nak mempertahankan benang basah berkenaaan GO RM 140 satu saham bagi Pontianak Plantation ni.

        Tapi cuba kao semua fikir fikirlah secara lapang. Penat2 u all kerja siang malam nak defen kerajaan , penat2 u all bertikam lidah dengan postgrad, undergrad dan tadika grad tapi akhir2 yang jadi billionaire Chen Man Hin.

        Yg aku tak paham pasal apa semua orang masih bermuka2 ni. Takkan tiada satu pun ketua cawangan, ke bahagain ke, ke ketua pemuda, ke ketua pemudi ke, ketua bloggers ke walaupun ketua jamban sekali pun yang mendesak Najib dilucutkan jawatan?

        He is the cause of the problem. Not me. Not Mavani. Mavani boneka je. Dia takkan bergerak selagi tiada backup.

        Kesudahannya, perut aku membujur tapi tak sampai memboseh. Harap ianya tidak dijadikan sup perut utk ikan2 yang berkeliaraan.

        Aku cipta polemik utk sedarkan orang ramai je. Sekadar nak membahas sekadar memutar auta Keling tapi kesudahannya ke mana? Selagi tiada mrk yang berani, selagi itulah kita boleh berpok-pek tanpa apa2…

        Fikir fikirlah…

  11. Biggie,

    I remotely unable to imagine any corporate executives, without relevant plantations experience decide to pay off a Cinapek RM195m to emancipate him from statutory obligations as a minority independent director in a Corp rule by communists-turned-anarchists.

    Then offer to pay off the Founder of Neo Malayan Communist Party a cool billion RM for 40,000 acres of brownfield of 18-20 yrs old palm trees, for a princely factor of 30.7 times PE at the times where CPO is only RM 2,250.

    Don’t they hv any shred of conscious that money they liberated from the kitty of RM 3.85b meant for strategic investments with the end objectives to take care re-development and CSR programs of all 112,635 Felda settlers and their families, in 114 schemes and neighbouring kampungs.

    Hv these selfserving and glory seeking armchair analysts turned absolutely greedy mad???

    Seriously….. Which level of insanity arent they all not at??

    BTW, I’m a shareholder. I bought 42,000 shares at open market. Thanks for bring all these nonsense up. I shall take very active role as a shareholder now!

    • You can make noise at the AGM once a year. They’ll shut you up by their millions of shares. You can complain to the Stock Exchange. They’ll threaten to sue you for trying to injure public confidence in the counter. You can try to report any wrong doings to the MACC. They’ll ask you what evidence do you have?

      Your only recourse left is to get the the delegates to the PAU in November. To replace Najib and then have the fake PhD fella replaced.

  12. Susah nak percaya.

    Penerangan terlebih teknikal lebih nampak macam kelentong.

    Sebab apa?

    1. Jawatan dipegang oleh orang yang dipertikai. Bila disoal, buat donno je.

    2. Dah tau pegang duit pemegang saham, nak buat tindakan berisiko yang jelas-jelas menguntungkan Cina DAP dan merugikan duit pemegang saham Melayu. Duit juta-juta tu boleh beli banyak orang tu…tak pun simpan dalam akaun bank oversea, kaya Cina tu.

    Nak kata pemerintah BN pandai sangat buat plan, dulu hapus ISA dan banyak usaha nak tarik undi pengundi Cina tu macam mana?

    Berjaya tak?Ingat orang nak percaya lagi ke?

    Penasihat korang tu HAMPEH!!!!

    • Mmg pukimak top management fgv ni…mmg betul kata ANAK dulu tp org tak percaya..

  13. Saya sungguh sedih dengan perkembangan ini. Kenapa selepas lebih 50 tahun Peneroka dan FELDA bertungkus lumus membangunkan ladang dan Felda Holding, Isa Samad dan Najib nak hulur kan duit sebanyak 1.2 Billion kepada Cina yang menentang kita di setiap Pilihanraya dari kemerdekaan negara kita. Jelas dalam PRU 13, kaum Cina tidak memilih kerajaan BN! Takde tanah lain nak beli, belilah tanah kerajaan. Sedih sedih sedih…..

    • Jika lama lagi Najib sebagai Presiden UMNO, banyak lagi lah hal hal saperti ini berlaku. Sejak dia sumbatkan Omar Ong ke BOD Petronas. Hassan Merican terpelanting ke Singapura. Dia dan sekutunya tak kisah, Omar Ong bertepuk tangan.

      Kita mesti selalu keluarkan suara di sini dan di lain lain tempat. Membantah dan membangkang telatah yang merosakkan dan akhirnya menjahanamkan hak dan kepentingan Melayu.

      Gila, badan badan Kerajaan (GLCs) yang sepatutnya memajukan hak dan kepentingan orang orang kampong dan orang orang Melayu di lain lain tempat di letaknya penipu penipu – bin Abdullah memakai ijazah PhD tipu di FGVH dan Azeeez penipu memakai ijazah MBA tipu di Tabung Haji. Kalau ijazah pun mereka tipu, kemungkinannya macam macam lain pun akan mereka lakukan untuk kepentingan lain dari kepentingan orang Melayu.

      Yang amat mengkhuatirkan ia lah Najib nampak macam tak pedulikan apa kita semua kata. Ini bahaya. Kapada hak dan kepentingan Melayu yang UMNO berikrar mahu pertahankan dan majukan bila di tubuhkan lebih 60 tahun dahulu. Najib perlu di gantikan di PAU November ini. Cari yang lain yang benar benar berjiwa Melayu dan akan memajukan kepentingan Melayu.

  14. Kenapa lah bodoh benor orang atas FGVH tuu , jika ye nak beli pun , buat lah cara tipubalas , suruh Sime Darby beli dulu kemudian baru FGVH ambil alih , jadi tak lah nanti nampak sanagt sedangkan orang melayu khusus nya sekarang sangat marah kepada DAP hatta bayang seluar dalam yang dipakai oleh p[emimpin mereka kalau boleh tak mahu terbau inikan pula membeli ladang milik DAP atau pemimpin mereka.

    Untuk Najib , nasihatkan lah si Isa itu berfikir 10 kali , jangan sampai seluruh anak cicit FELDA beramai-ramai lari ke seberang bukan kerana suka orang sebrang tetapi dek sebab kan meluat dengan cara tindakan orang melayu UMNO

    • Ingin nak tahu – Isa ke yang letakkan Mavani tu ke FGVH? Saya ingat Najib. Atau bebudak Tingkat 4, di Pejabat Perdana Menteri, yang aturkan, di persetujui atau di diamkan si Najib bila depa guna nama dia, kata dia suruh.

  15. I can sense some serious money laundering activities going on here.

  16. Sedih baca posting ni. Apalah nasib orang Melayu. Harapkan pagar, pagar makan padi. Terang-terang kena rompak dek orang yang kita amanahkan untuk jaga harta kita. Lebih pedih lagi, hasil rompakan dikongsinya dengan musuh ketat kita.

    Kalau tak ada perubahan semasa PAU nanti, aku rasa dah tiba masanya PERKASA mendaftarkan diri sebagai Parti Politik!

  17. Shadow banker

    If the commie do not want to sell, why buy?

    Pandainya cybertrooper Pemandu. Masuk gaung lah Malaysia bawah Pemandu

  18. Ada cash lebih baik harta terutama tanah. Khususnya jika beli di malaysia dibandingkan diluar negara. Biar mahal sedikit banding di luar negara. Risiko di malaysia rendah kerana kita tahu syarat undang-undang tanah dan kurang kerenah birokrasi berbanding diluar negara. Penilaian dan analisa kewangan penting untuk pelaburan tetapi biarlah yang musabah. Beberapa andaian perlu dibuat dengan secara konsevatif dan elakkan terlalu optimistik. Sebagai contoh jangan guna hasil sehektar pada purata 25 tan @ 25 % OER. Itu angka trial. Angka yang munasabah secara konsevatif di ladang 22 tan/ hek @ 21% OER. Disabah angka berkenaan munasabah dicapai. Kalau dibuat terlalu optimistik nanti FGV akan menerima nasib seperti di TRT Bostan. Bagi saya harga yang ditawarkan 1.2 billion untuk Pontian United agak mahal dan FGV harus merojok kepada penilai tanah profesional di pasaran dan jangan harap sangat penilai dalaman. Apa yang saya perhatikan bahagian Strategik FGV belum competent kerana banyak FGV gagal. Contoh TRT, kilang tapis di china, joint venture IFFCO dan FIAM. Akibatnya tahun 2012 FGV untung tak sampai satu billion daripada revenue 13 billion, Pemegang saham kecewa harga tak naik diveden tak sampai 3 %. Saya minta kerajaan dan pengurusan berhati-hati melantik ahli lembaga pengarh, Presiden, CEO. Peganglah kepada ayat Al Quran dimana bermaksud letakkanlah sesuatu kepada ahlinya untuk mengelakkan kehancuran. Saya nampak sejak kebelakangan ini semangat kekeluargaan dan team work dalam felda dah longgar tak macam dulu semasa awal felda ditubuhkan, kita enjoy bekerje walaupun gaji ciput berbanding diladang dan kilang swasta. Saya ingat pernah bos besar saya pesan dapatkan petugas yang hendak berkerja dengan kita berbanding yang mengharapkan gaji yang tinggi. Dengan semangat kekuargaan yang tinggi , team work yang jitu, strukture yang jelas, leadership yang terpuji serta pengurusan yang cekap maka felda maju dan terpuji sehingga ini, Tapi kini boleh dipersoalkan. Struktur sukar difahami, pengurusan agak berkecamuk sehingga pemborng pun merunggut lambat payment , kos tinggi contoh kos tanam semula meningkat dua kali ganda dan progres lambat. Jika keadaan ini berlarutan saya bimbang kegemilangan felda akan merudum dan suram. Kesannya pa da peneroka khususnya dan kerajaan akan menerima tempias. Salam

  19. […] The more appalling bit is that he also appointed Baling MP Dato’ Azeez Rahim as Chairman of Tabung Haji, Ketereh MP Tan Sri Annuar Musa as Chairman of MARA, Kibatangan MP Bung Mokhtar Radin as Chairman of FELCRA and affirmed Emir Mavani as CEO of FGV. […]

  20. Big Dog’s barking up the wrong tree with FGV Pontian Plantation deal

    I have been a fan of Big Dog for many years. While I sometimes disagree with his stand, I was never move to counter his thoughts, until now. I find his argument on Pontian Plantation off the mark.
    I for one found it admirable that Felda have the courage to take on the targeted acquisition, even though it is helmed by a well know DAP leader. But corporate leaders often travel in the path less traveled. I believe that the present offer by FGV is made by a willing buyer and we hope that it will find a willing seller.
    In this case, FGV has only made an offer and Pontian has not responded if they are going to do the deal. If the deal is sweet enough, Pontian Plantations may change hands.
    On the other hand the seller may choose not to sell to Felda, in which case Felda may have to further sweeten the deal. Felda have already shown their hands by purchasing TSH Resources as reported by the Malaysian Reserve on, 19 July 2013. This exercise is in line with FGVH plans to further expand its oil palm plantations as reported earlier in the local exchange. At this stage FGV owns 23.81% of Pontian Plantation.

    Interestingly just a year ago, TSH Resources made an offer of RM90 per share for the 6.94 million shares or 80.28% of Pontian share it did not own, for a total deal value of RM625 million. The deal fell through when TSH Resources had only managed to increase its shareholdings from 8% to 20.2%. The question now: will Felda succeed where TSH Resources has failed?
    On closer examination, TSH Resource actually managed to amass some 12.2% of shares in the exercise, perhaps from minor shareholders wishing to cash out. Unfortunately the major shareholders were unmoved.
    With this particular deal, what analysts think has no bearing for the seller. It is highly likely that Chairman Chen Man Hin may want to do this transaction, given the sweet deal. If he does, it will be a major moral victory for FGV, UMNO and even PM Najib.
    TSH tried to take over Pontian with a RM 90 per share and failed. Because so much is at stake here, FGV have sweetened the deal by another RM 50 per share, making it financial foolishness for the owners of Pontian Plantations not to accept. Sometimes, to win in business, one has to be highly irrational, not rational. Once the company switches owners, money can be generated via other ingenuous methods.
    Of the remaining 76.19% of the share, Chairman Chen controls only 65.6%. That means there is still a large pool of minority shareholders controlling some 10.59% that is not in Chairman Chen hands. These folks may be willing to cash out at this fabulous RM 140 offer.
    Big Dog pointed out that when TSH Resources offered to take over Pontian Plantations last year, the CPO was at RM 3,200 per ton. The current proposed offer of RM 140 per share today is at the point where the CPO price is RM 2,300 per ton.
    Big Dog thinking is too narrow, looking at crop prices which are cyclical in nature. Felda is buying into the company, the land, asset and an on-gong profitable business. Land prices can only go up in the long run and the purchase can create a moral victory for FGV and Chairman Isa.
    It is interesting to note that both TSH and PUPB plantation fields have been neighbours since the 1990s, sharing the same access road in Lahad Datu, Sabah.
    Perhaps Felda is looking into the possibilities of merging TSH and PUPB once the deal is signed. The benefits of the merger are many, included economies of scale in both companies’ supply chains, logistics, distributions, finance and employee training.
    Felda must also be targeting TSH’s biotech Wakuba high-yield clone, a technology developed by TSH’s biotech centre in Sabah. The Wakuba ramets are said to produce around eight to 10 tonnes per hectare of palm oil yield, compared with the current industry average of four to six tonnes.
    When Felda is able to do the deal, it would be able to reap benefits from TSH’s biotech Wakuba high-yield clone…’ especially so if they control the country’s largest collection of palm oil plantations.
    If Felda is able to do the deal, a merger with TSH will result in increased planted plantation land bank size and eventually lead to a higher fresh fruit bunch output.
    Big Dog observes that these Chinese businessmen failed to sort out their own affairs on the own. He thinks that FGV is absolving Kelvin Tan from his duties and commitments in BOD of Pontian Plantations by taking up all of the 23.8% holding but without BOD and management control.
    The way I see it, far from absolving Kelvin, FGV sees an opportunity to gain a foothold into a highly desirable prize called Pontian Plantation. Taking over Pontian Plantation from Dr. Chen may effectively remove him from the industry. This is a highly desirable scenario for some quarters. FGV has sweetened the deal, to make it financial foolishness for Dr. Chen and the owners of Pontian Plantations not to accept.
    If FGV fails to persuade Pontian Plantation to sell, the winner would be Kelvin Tan, but the game has not concluded as yet.
    This exercise must be viewed as a wholly business transaction. It matters not who the sellers are. If the purchase is within Felda’s corporate objectives, then the question is, why not?
    When Isa succeed in this exercise, he will be viewed as a visionary threading in wolf’s territory.

  21. […] non-halal deals such as proposed acquisition of the New Britain plantations off Papua New Guinea, Pontian Plantations which one of the vendors is DAP Life Adviser Dr Chen Man Hin and the discount given for RBD palm olien to […]

  22. […] What is most shameful is the believe that Isa did not do his best to stand up for Sabri, in the latter’s most trying moments. Especially in the tone where FGV is making ‘very expensive investments’. […]

  23. […] is on top of following through the controversial acquisition of 16,000ha Pontian Plantations Bhd., at the price of RM140 per share which is at 30.7 times PE […]

  24. […] is on top of following through the controversial acquisition of 16,000ha Pontian Plantations Bhd. in East Sabah, at the price of RM140 per share which is at 30.7 times PE […]

  25. […] FGV simply put a lot of cash into the hands of Dr Chen’s and his band of anti-constitution coh…. In short, FGV just funded DAP. […]

  26. […] FGV simply put a lot of cash into the hands of Dr Chen’s and his band of anti-constitution coh…. In short, FGV just funded DAP. […]


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