KUALA LUMPUR: Sabah government, today, approved Priceworth International Bhd’s Forest Management Plan (FMP), paving the way for its proposed acquisition.
"With the Sabah Forest Department’s approval of the FMP from September 1, 2017 to August 31, 2027, a condition precedent of the proposed Forest Management Unit No.5 (FMU5) acquisition has been deemed fulfilled,” said Priceworth executive director Richard Koo.
The first condition precedent to be fulfilled was in May, with the Sabah Forest Department’s approval of repair, upgrading and harvesting operations in two compartments in FMU5.
“Our operations in Compartments 57 and 58, which began while the FMP was under final preparation, will be continuing as permitted,” said Koo.
Priceworth today announced that the third FMP has been approved by the Sabah Forest Department and accepted by Anika Desiran Sdn Bhd (ADSB) which owns the rights to manage, replant and harvest FMU5.
Through its Singapore subsidiary GSR Pte Ltd, Priceworth has proposed to acquire ADSB and FMU5 from vendor Transkripsi Pintar Sdn Bhd for RM260 million.
A Singapore Exchange-listing is being planned for GSR, which has also proposed to acquire sister company Sinora Sdn Bhd, which is Priceworth’s plywood manufacturing arm.
FMU5 is part of 1.8 million ha of Class II commercial forest reserves being managed under Sustainable Forest Management Licence Agreements (SFMLA), which are guided by FMPs as regulated by the SFD.
One requirement of the FMP was already met in November 2016, with the surrender of 12,241 ha from FMU5 to be conserved as a Class I protected forest.
This area has been fused with FMU10, which is now known as the Nuluhon Trusmadi Forest Reserve.
With the excision, FMU5 now comprises 88,920 ha with tenure of 81 years remaining.
One of the remaining condition precedent to the deal is the execution of a supplementary agreement to reflect the excision, the company said.
“The third FMP was drawn up following extensive consultation among the SFD’s Forest Management Plan Team, researchers, government agencies and non-governmental organisations (NGOs),” said Koo.
“We fully support the aims and objectives of SFM, which is crucial for conserving and protect the natural resources of the State for future generations,” said Koo.
“Priceworth fulfills Sabah’s SFM regime and its key measure of Reduced Impact Logging (RIL). We are well-placed to excel in this new landscape for sustainable renewable timber and forest resources,” he added.
Over the last 10 years, Priceworth has invested more than RM100 million in upgraded equipment as part of its commitment to producing sustainable, renewable timber, including eight log fishers which are approved for RIL, a forest harvesting technique which helps minimise the environmental impact on forests, soil and water quality.
The final valuation is expected to be completed and submitted to Bursa Securities by mid-December 2017, it added.