Rimbunan Sawit calls off joint venture to develop Sarawak NCR land

• In a filing with Bursa Malaysia on Thursday, Rimbunan Sawit said it had entered into a rescission agreement with LHSB to mutually terminate the JV agreement signed in April 2001.

KUALA LUMPUR (July 24): Sarawak-based oil palm plantation company Rimbunan Sawit Bhd (KL:RSAWIT) has announced the termination of its joint venture (JV) with LCDA Holdings Sdn Bhd (LHSB), formerly known as Pelita Holdings Sdn Bhd. The partnership was initially formed to develop a parcel of native customary rights (NCR) land in Ulu Selangau, Sibu into an oil palm plantation.

In a filing with Bursa Malaysia on Thursday, Rimbunan Sawit said it had entered into a rescission agreement with LHSB to mutually terminate the JV agreement signed in April 2001. Under the original JV, both parties were to jointly develop the land through a JV company PJP Pelita Selangau Plantation Sdn Bhd (formerly known as Ladang Metah Sdn Bhd). Rimbunan Sawit held a 60% stake in PJP Pelita, while LHSB owned the remaining 40%.

As part of the rescission, Rimbunan Sawit will acquire LHSB’s 40% stake in the JV company for RM1.2 million, to be funded via internal funds. Upon completion of the share transfer, PJP Pelita will become a wholly-owned subsidiary of Rimbunan Sawit, and both parties have agreed that there will be no further claims or obligations under the original JV agreement.

LHSB, nominated by the Land Custody Development Authority (LCDA), had been acting as trustee for the development of the land on behalf of the NCR landowners—natives with customary rights over the area.

According to Rimbunan Sawit, the decision to discontinue the project was made in light of various challenges faced by PJP Pelita in executing the project and achieving the JV’s intended objectives. Given the extended timeline and significant resources required to proceed, both parties agreed that discontinuation was the most pragmatic and strategic option.

"This decision will enable Rimbunan Sawit to reallocate resources more effectively and to refocus on its core business and long-term strategic priorities," the group said.

Rimbunan Sawit shares closed unchanged at 18.5 sen on Thursday, giving it a market capitalisation of RM367.78 million. The stock has fallen 19.57% year to date.

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