KUCHING: WTK Holdings Bhd is to acquire oil palm plantations and a palm oil mill located in Mukah, Bintulu and Miri Divisions respectively for a total of RM555 million in cash.
The proposed acquisitions are from WTK Realty Sdn Bhd, a major shareholder of WTK, in a related party transaction.
WTK has entered into a conditional Share Sale Agreement (SSA) with WTK Realty to acquire 100 per cent equity interest in Desacorp Sdn Bhd for RM230 million.
WTK Realty is principally involved in investment holding, extraction and trading of logs, including barges operation as well as property development.
Separtately, WTK’s wholly owned subsidiary, BioPalm Ventures Sdn Bhd, has inked SSAs with WTK Realty to buy 70 per cent equity interest in Imbok Enterprise Sdn Bhd for RM290 million, and 70 per cent equity interest in WTK Oil Mill Sdn Bhd (WTK OM) for RM35 million.
“The purchase consideration of RM555 million shall be satisfied entirely via a combination of internally generated funds of WTK group and bank borrowings/sukuk financing. The breakdown and proportion of the sources of funds are expected to be internally generated funds of RM165.5 million (30 per cent) and bank borrowings/sukuk financing (RM388.5 million (70 per cent),” WTK said in a filing with Bursa Malaysia.
The Sibu-based timber/plantation company had in January 2025 established an Islamic medium-term notes programme based on the syariah principle of Wakalah Bi Al-Istithmar (Sukuk Wakalah) with a tenure of up to 30 years, commencing from the date of the first issuance.
As of June 30, 2025, WTK’s cash and bank balances stood at RM263.4 million while total borrowings amounted to RM399.4 million.
Subject to all required approvals being obtained, the proposed acquisitions are expected to be completed in the first quarter of 2026 (1Q2026).
Desacorp, which is involved in the planting and management of an oil palm plantation in Mukah Division, has a landbank of about 5,229 hectares, with a total planted area of 4,543 hectares. More than 90 per cent of the oil palms are prime mature and mature.
The age profile of Desacorp plantation estates are matured (15-18 years) 2,634 hectares (57.98 per cent), prime mature (9-14 years) 1,543 hectares (33.95 per cent), young mature (4-8 years) 232 hectares (5.09 per cent) and immature (0-3 years) 135.2 hectares (2.98 per cent).
In the last three financial years ended September 30, Desacorp plantation estate’s fresh fruit bunches (FFB ) productions were 95,829 tonnes (2022); 90,465 tonnes (2023) and 95,844 tonnes (2024).
Imbok Enterprise owns a landbank of 11,020 hectares, with a total planted area of 9,846 hectares. More than 80 per cent of the oil palms are immature and young mature.
For the Imbok Enterprise plantation estate, the young mature stood at 4,161 hectares (42.26 per cent), immature 4,110 hectares (41.74 per cent) and extended (more than 25 years) 1,575 hectares (16 per cent).
The Imbok estate’s FFB production in the past three years had dropped significantly: from 130,873 tonnes (2022) to 116,219 tonnes (2023) to 92,847 tonnes (2024).
“As the palms enter into maturity and move into higher yielding age bracket, Imbok Enterprise plantation estate’s oil palm yields are poised to further improve and the growth momentum in their earnings is expected to continue in the future financial years,” said WTK.
The proposed acquisitions of Desacorp and Imbok Enterprise will expand WTK group’s oil palm planted area from existing 21,129.59 hectares to 35,518.86 hectares, representing an increase of 68.1 per cent (14,389.27 hectares).
“This expansion aligns with WTK’s long-term strategy of strengthening its footprint in the plantation sector, which has become a core revenue driver of the group. Given the scarcity of seizable and suitable land for oil palm cultivation in Malaysia, the proposed acquisitions present a valuable opportunity to secure land banks that will contribute to WTK’s long-term production growth,” the company said on the rationale for the proposed acquisitions.
Out of the existing 21,130 hectares of planted area, about 9,560 hectares (45.35 per cent) are prime mature; 4,117 hectares (19.48 per cent) mature; 3,992 hectares (18.89 per cent) young mature and 2,456 hectares (11.62 per cent) immature.
WTK said upon completion of the proposed WTK OM, the palm oil mill will primarily support the processing of FFB from the group’s plantations.
This will improve the overall efficiency of WTK’s supply chain by securing a dedicated milling facility for its expanding plantation business, which include the following benefits: (a) cost efficiencies by reducing reliance on third-party mills; (b) better quality control over crude palm oil (CPO) production; and (c) optimised logistics and transportation costs as the palm oil mill is located with the Imbok Enterprise plantation estate.”
In FY2024, the audited after-tax profits of the three companies were: Desacorp (RM20.5 million), Imbok Enterprise (RM11.54 million) and WTK OM (RM4.87 million), bringing to total RM36.93 million.
“Upon completion of the proposed acquisitions, WTK group will be strategically positioned for long-term growth and sustainable value creation across its core business segments.
“The expansion of oil palm plantation and palm oil milling operations will strengthen revenue streams, improve operational efficiencies and enhance overall profitability.
“Given the strong demand for palm oil, WTK group is optimistic about the plantation division’s ability to contribute sustainable growth and profitability in the years ahead,” said the company.
