Leweko ... Apr 09

Leweko Resources Bhd is selling its oil palm plantation business in Perak for RM35.65 million, a move that will see the company left with only the timber business.

Leweko will sell its entire 100% interest each in Kota Pinang Sdn Bhd for RM16.84 million, Sesenduk Air Sdn Bhd for RM11.64 million and Petralman Sdn Bhd for RM7.17 million. The buyers are Kilang Kelapa Sawit Lekir Sdn Bhd (KKSL), Citarasa Unggul Sdn Bhd and Nutri Valley Sdn Bhd. KKSL is acquiring a 70% stake, Citarasa Unggul a 15% stake, and Nutri Valley a 15% stake, each in the three plantations firms.

The proposed disposal will enable Leweko to rationalise its business activities and focus its resources on its core timber operations. In addition, it will provide the necessary financial resources for Leweko to meet challenges posted by the current difficult market conditions resulting from the current global economic downturn, as well as to take advantage of investment opportunities which may arise from time to time.

Leweko's original cost of investment in Kota Pinang was RM16.41 million on Nov 1 2008, 2003, and those in Sesenduk Air and Petralman were RM12.6 million and RM5.17 million, respectively, on the same date. The proposed disposals are expected to result in a gain of about RM12.4 million, thus increasing Leweko's shareholders funds to RM203.47 million from RM191.07 million as at July 3, 2008. Its net asset per share will also rise to 84 sen from 79 sen.