| Deal #3720 | Version 63135 | Version 63136 |
|---|---|---|
General info | ||
Employment | ||
Investor info | ||
Local communities / indigenous peoples | ||
| Community consultation | Limited consultation | Not consulted |
| Comment on consultation of local community | customary owners claim that FPIC was not secured when the SABLs were approved | |
| Presence of organizations and actions taken (e.g. farmer organizations, NGOs, etc.) | Oro Community Environmental Action Network (OCEAN), Rainforest Action Network (RAN), and Greenpeace | |
Former use | ||
Produce info | ||
Water | ||
Gender-related info | ||
Overall comment | ||
| Overall comment | Local organisations, which claimed to be clan leaders/owners of the second and third pieces of land, had filed an interim injunction against the PNG Government and other defendants over the government's failure in obtaining the consent of the customary landowners prior to the issuance of the SABLs, which is a mandatory requirement of the SABL procedure. The PNG Government had chosen not to defend the suit, resulting in the SABLs over the land being rescinded. | |
Meta | ||
| Fully updated | Yes | No |
Locations | ||
Data sources | ||
Data source #Eg_fuDov | ||
| Type | Other | |
| Url | ||
| Keep PDF not public | No | |
| Date | 2014-05-23 | |
| Comment on data source | Kuala Lumpur Kepong‟s (KLK) has experienced a stumbling block in relation to the landbank it acquired in Papua New Guinea (PNG) in Dec 2012. Given the withdrawal of the PNG Government in defending its suit launched by certain local organisations, it seems that KLK would not be able to conclude the entire land acquisition deal agreed in end-2012. In view of this hiccup, it could reduce KLK‟s land exposure in PNG from 44,342ha to 5,992ha only. No change to our earnings forecast as we had not expected any significant contribution from its PNG‟s entry any time soon. We maintain our Neutral call on KLK with an unchanged TP of RM26.26.
To recap. KLK and its parent company, Batu Kawan had acquired a 51% and 18% equity stake respectively in Collingwood Plantations (CPPL) from Mr. Hii Eii Sing (the vendor) in Dec 2012. CPPL, via its wholly-owned PNG-incorporated subsidiary called Ang Agro Forest Management (ANG), has registered rights over three pieces of land located in an area called Collingwood Bay in the Northern Oro province. The three pieces of land are: i) a 99-year State Lease over 5,992ha, ii) a 49-year sublease over 21,520ha of land held under a Special Agricultural & Business Lease (SABL) and iii) a 49-year sublease over 16,830ha of land also held under a SABL.
What happened? Local organisations, which claimed to be clan leaders/owners of the second and third pieces of land, had filed an interim injunction against the PNG Government and other defendants over the government‟s failure in obtaining the consent of the customary landowners prior to the issuance of the SABLs, which is a mandatory requirement of the SABL procedure. The PNG Government had chosen not to defend the suit, resulting in the SABLs over the land being rescinded.
Recovering the money. The total land purchase cost for KLK‟s 51% stake in CPPL was USD7.8m (RM25m) and the group has so far paid up a portion of amount, which is about USD3.6m (RM11.5m). The group is taking steps to recover a proportionate amount of the purchase price from the vendor. We see no changes to our earnings forecast in view of this incident. We maintain Neutral call on KLK with an unchanged TP of RM26.26 | |
Contracts | ||