Ballarpur to pick up SFI equity in Malaysia

Mumbai, Jun 5: Ballarpur Industries Ltd has entered into a conditional agreement for the acquisition of 97.8 per cent equity of Sabah Forest Industries (SFI) Sdn Bhd, a Malaysia-based company, for a consideration of US 1 million.

SFI, situated in the Sipitang Province of Sabah, operates the largest integrated paper and pulp mill in Malaysia.

Announcing this to BSE, the company said the agreement was signed on June 4, making it clear that the acquisition would be subject to completion of all necessary regulatory and corporate approvals.

The consideration is to be paid over a period of 18 months from completion based on the legal, technical, regulatory and financial due diligence that is intended to be carried out by the company, the release said.

SFI has a paper capacity of 144,000 MTPA and pulp capacity of 120,000 MTPA together with various forest concessions including 289,000 hectares of land on lease valid till December, 2094.

Its other assets include a jetty, a power plant facility and a steam generation facility.

The acquisition is proposed to be done jointly by J P Morgan and the company to purchase a stake of upto 20 per cent in SFI, with the balance being acquired by Ballarpur Industries either directly or through its affiliates/nominees.

Besides providing access to integrated pulp and paper capacity of SFI, the acquisition will help secure future availability of fibre for the company, the release stated.

UNI