Guthrie sells land to fund acquisition

Guthrie sells land to fund acquisition

KUALA LUMPUR (Dow Jones): Kumpulan Guthrie Bhd., a Malaysian plantations and property company, Friday said it plans to sell land in Malaysia to pay for recent acquisitions in Indonesia.

Ghazali Bin Awang, executive director for finance and corporate service, said Kumpulan could sell by the year-end as much as 1,000 hectares of land in Malaysia, some of which is still under cultivation.

Proceeds from the sale could bring in an estimated 700 million to 900 million ringgit (US$23.6 million) since some of it is in the Klang Valley outside Kuala Lumpur, he said. Land in the Klang Valley is relatively more expensive compared to the rest of the country.

The move is aimed at reducing debt stemming from the purchase earlier this year of 25 oil palm plantations in Indonesia spread over 203,000 hectares. Guthrie paid $368 million for the estates, for which it borrowed 1.4 billion ringgit.

Ghazali, who was speaking at an investors' conference at the Kuala Lumpur Stock Exchange, said the company plans to transform the ringgit loan into dollar loans, but declined to provide details.

He said Guthrie is currently in talks with potential buyers of about 1,300 acres of land near the capital worth about 500 ringgit million. The sale could go through in the next few months, he said.

Kumpulan Guthrie last month reported a net loss of 24.5 million ringgit for the first half, from a net profit of 15.9 million ringgit a year earlier.