Tuesday, October 25, 2011

#Update*Dutaland rejects IOI Corp bid to cancel RM830m land purchase

KUALA LUMPUR: IOI CORPORATION BHD []'s move to terminate its proposed acquisition of 11,977.91 ha (29,597.42 acres) of oil palm PLANTATION [] land from DUTALAND BHD [] for RM830 million has been rejected by the latter.

IOI Corp said on Tuesday, Oct 25 the cancellation was 'due to non-compliance of certain terms and conditions'.

However, in a separate statement, Dutaland said it did not accept the reasons for termination of the sales and purchase agreement and directed the stakeholder, OSK Trustees Bhd not to remit the deposit of RM83 million, which was the 10% deposit paid.

To recap, on July 28, IOI Corp's unit Sri Mayvin Plantation Sdn Bhd had signed a sale and purchase agreement with Dutaland's unit Pertama Land & Development Sdn Bhd for the land.

The rationale then was that the proposed acquisition would increase IOI group's plantation land-bank by 11,977.91 ha or 6.69% from its present 178,884 ha to 190,862 ha in Malaysia.

IOI Corp had then said the total planted area of the plantation land was about 10,449 ha of which about 85% of the estate is at its prime with oil palm trees ranging between three years to 15 years. The plantation land was also adjacent to the group's Mayvin estates.

However on Tuesday, Sri Mayvin issued a notice to Pertama Land to terminate the agreement'' due to non-compliance of certain terms and conditions which had been communicated to Pertama Land.

'Under the provision of the SPA the rights and obligations of the parties shall lapse and be of no further effect from the date of termination notice,' it said.

However, Dutaland said on it was taking legal advice over the notice relating to the alleged non-compliance of certain obligations by Pertama Land.

'The company is taking legal advice and has duly notified Sri Mayvin today that the company does not accept Sri Mayvin's reasons for termination of the SPA.

'Accordingly, the company has notified the Stakeholder, OSK Trustees Bhd not to remit to Sri Mayvin the deposit of RM83 million being the 10% deposit paid by Sri Mayvin under the SPA and any interest accrued thereon,' it said.

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