KUCHING: WTK Holdings Bhd expects to book an estimated one-off gain of RM86.59 million after agreeing to dispose of three oil palm plantation assets in northern Sarawak to Trinity Capital Resources Sdn Bhd for RM221.5 million cash.
The proposed disposals will also raise the group’s net assets (NA) per share to RM1.77 from RM1.60 as at Dec 31, 2025.
WTK said the exercise forms part of its ongoing strategy to optimise and rebalance its plantation asset portfolio after an internal review of its estates, taking into account plantation age, operational requirements, future replanting commitments and long-term yield potential.
“The proposed disposals represent a strategic portfolio rationalisation exercise,” the company said in a filing with Bursa Malaysia. It said the estates, located at the northern tip of Sarawak near the Sarawak-Brunei border, present structural limitations to group-wide integration.
The plantations are situated about 90km from the group’s nearest palm oil mill, Biobest Venture Palm Oil Mill, resulting in higher logistics costs, including external transportation expenses of up to RM4.3 million in the financial year ended 2025, as well as deterioration in fresh fruit bunch quality due to extended transit time.
Although third-party mills are located closer to the estates, WTK said relying on them exposes the group to rejection risks and quality downgrades, while processing through external mills does not contribute to utilisation of its own milling capacity or overall profitability.
“The proposed disposal therefore represents a strategic realignment of the group’s plantation footprint, enabling the consolidation of operations within the group’s core operating regions to optimise economies of scale, improve operational efficiency and enhance overall cost effectiveness,” it said.
WTK said the estates have an average oil palm age of about 14 years.
While productivity typically peaks between years eight and 18, yields are expected to decline naturally from year 19 onwards, requiring significant capital expenditure for future replanting and upkeep.
“In light of their location and operational constraints, the expected returns from such investments may not commensurate with the required capital outlay.
“The proposed disposals allow the group to avoid substantial future capital commitments and provide greater flexibility to redeploy financial resources towards estates with stronger yield potential and better strategic fit within the group’s core operating regions,” it said.
The disposal involves three separate agreements with Trinity Capital.
Under the first agreement, wholly owned subsidiary Towering Yield Sdn Bhd will dispose of the group’s entire 65% equity interest in Positive Deal Sdn Bhd together with 23.18 million redeemable preference shares (RPS) in the company for RM27 million.
Another wholly owned subsidiary, Biogreen Success Sdn Bhd, will sell the Biogreen estate and related plantation assets for RM145.2 million, comprising RM141 million for the estate and RM4.2 million for other plantation assets.
The assets include 4,698.2 hectares of land in the Teraja Land District, Miri.
The third transaction involves wholly owned subsidiary Borneo Agro-Industries Sdn Bhd, which will dispose of the Borneo estate and related plantation assets for RM49.3 million, comprising RM47 million for the estate and RM2.3 million for other assets.
The plantation covers 849.6 hectares in the Kuala Baram Land District.
WTK said disposing of the three adjoining plantation assets to a single buyer could enable Trinity Capital to realise operational synergies and economies of scale, which were taken into account during commercial negotiations.
The total disposal consideration represents a premium of about RM11.9 million, or 5.7 per cent, over the combined independent valuation of RM209.6 million, with each transaction priced at premiums ranging from 4.62 per cent to 8.55 per cent.
The group said the proposed disposals will also strengthen its liquidity by monetising the assets.
Of the RM221.5 million proceeds, RM185.6 million, or 83.8 per cent, will be allocated for working capital, mainly for the plantation business.
The allocation includes 20 per cent for plantation development and replanting, 30% for plantation maintenance and upkeep, 35 per cent for payments to suppliers and creditors, and the remaining 15 per cent for administrative and day-today operating expenses.
Another RM27 million will be used to fully repay an outstanding term loan with Affin Bank Bhd.
As at May 31, 2026, WTK’s total bank borrowings stood at about RM785.6 million, including the RM27 million term loan secured against the Biogreen estate.
The group has also set aside RM8.11 million to pay the estimated real property gains tax arising from the Biogreen and Borneo disposals, while estimated transaction expenses amount to RM700,000.
Upon completion of the proposed disposals, WTK’s total planted oil palm area will stand at 26,421 hectares.
Subject to the necessary approvals, the company expects the proposed disposals to be completed in the first quarter of 2027.
WTK will convene an extraordinary general meeting to seek shareholders’ approval for the proposed disposals on a date to be announced later.
