M.P. EVANS GROUP PLC
(“MPE” or “the Group”)
COMPLETION OF DISPOSAL OF MALAYSIAN LAND
The Group is pleased to announce the completion of its disposal of Bertam Estate, comprising 70 hectares of land near Penang Island in Malaysia, for US$24.0 million. The proceeds support continuing investment in the Group's sustainable Indonesian oil-palm projects.
Transaction details
The MPE board (“the Board”) is pleased to announce the completion of the sale of its wholly owned Bertam Estate, comprising 70 hectares of land, to Bertam Properties Sdn Berhad (“Bertam Properties”), a Malaysian property-development company in which the Group owns a 40% shareholding. Given the Group's long period of ownership, the land qualifies for a reduced rate of 10% Real Property Gains Tax in Malaysia on the profit from disposal. The sale agreement, signed in July 2020, was conditional, and all conditions have now been met, including Bertam Properties obtaining financing for the transaction. The total sale consideration is 99.9 million Malaysian Ringgit, equivalent at current exchange rates to approximately US$24.0 million. A 10% deposit was received on signing the agreement, and a further 50% of the consideration has now been paid on completion. With regard to the remaining consideration, 10% will be paid in January 2022 and the balance of 30% in July 2023.
The disposal is in line with MPE's strategy to realise its Malaysian assets for investment in new sustainable Indonesian oil-palm projects. Following completion of the sale, the Group's sole remaining Malaysian asset is its 40% shareholding in Bertam Properties, which will incorporate the land acquired from the Group. Bertam Properties has continued to establish profitable developments, even during the recent challenging market conditions, and is expected to add substantial value to the 70 hectares it has purchased for development, with the Group reaping its share of the benefit.
Commenting on the completion of the disposal, chairman of MPE, Peter Hadsley-Chaplin, said:
“Completion of the Bertam Estate sale is an important step forward for the Group and the sale proceeds will support its continuing investment in sustainable Indonesian oil-palm. This welcome, cash-generative, transaction further underlines the board's stated intention to recommend a total dividend of at least 30p per share in respect of 2021.”