United Malacca Bhd is set to acquire full ownership of its Indonesian plantation arm PT Lifere Agro Kapuas (LAK) in a $10mn (MYR42.25mn) transaction aimed at consolidating its regional operations and strengthening control over its assets in Central Kalimantan, The Edge Malaysia reports.
The Malaysian plantation firm currently holds an 83% effective stake in LAK through its Singapore-based subsidiary International Natural Resources Pte Ltd (INR), in which it owns 88.2%. INR, in turn, controls 94.1% of LAK. The deal involves the purchase of the remaining 17% interest from PT Bank OCBC NISP Tbk, a unit of OCBC Singapore and a substantial shareholder in United Malacca, making the deal a related party transaction.
Under the agreement disclosed July 28, United Malacca and its wholly owned Vintage Plantations Sdn Bhd will buy an 11.8% stake in INR and a direct 5.9% stake in LAK from OCBC. LAK, incorporated in 2005, is involved in oil palm cultivation and milling, and has been a core contributor to United Malacca’s Indonesian footprint.
To account for unresolved legacy tax issues tied to LAK, $1.1mn will be placed into an escrow account until Indonesia’s tax court finalises the amount owed. Funds will then be used to settle the outstanding liabilities.
The company will fund the acquisition using internal cash reserves, which stood at MYR99.73mn as of end-April 2025. It also had MYR60.44mn in short-term borrowings at the time. United Malacca said the buyout aligns with its long-term strategy to sharpen focus on plantation growth across the region.
Full ownership is expected to unlock operational efficiencies, faster decision-making, and improved profitability. The group's audit committee deemed the transaction fair and in the best interest of shareholders.
Shares in United Malacca closed 0.97% lower at MYR5.20 on July 29, giving it a market cap of MYR1.09bn.
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