Sime Darby Berhad : announces restructuring plan

The plan is expected to involve an internal restructuring and share distribution exercise prior to the proposed listing of its plantation and property businesses. With the listing, the three companies, namely, Sime Darby Plantation Sdn Bhd (Sime Darby Plantation), Sime Darby Property Berhad (Sime Darby Property) and SDB with their focused businesses will be well positioned for further growth in their respective sectors globally and regionally.

With direct access to capital markets and funding flexibility, each pure play company will benefit from better focused capital management and customised growth strategies. Meanwhile, shareholders will be able to participate directly in the equity and growth of the three companies with greater visibility on the financial performance of each separate listed entity.

As part of the internal restructuring, it is expected that the borrowings of the SDB Group will be restructured, certain assets to be transferred and inter-company loans to be capitalised. This will involve engagements with various parties including rating agencies, lenders and creditors of the SDB Group to ensure that an optimal capital structure is achieved for the respective pure play entities.

For purposes of the listing, it is expected that the entire shareholdings of SDB in Sime Darby Plantation and Sime Darby Property will be distributed such that all the entitled shareholders of SDB will receive shares in Sime Darby Plantation and Sime Darby Property, proportionate to their shareholdings in SDB. SDB will not own any stake in Sime Darby Plantation or Sime Darby Property upon completion of the distribution (see attached). However, the proposed listing of Sime Darby Plantation and Sime Darby Property may be implemented together or at different times, depending on, among others, the readiness of the businesses and also compliance with regulatory requirements for listing.

'The intended corporate structure is aimed at maximising the value for shareholders who will eventually hold shares in three exciting pure plays. Sime Darby Plantation is a world leader in sustainable palm oil with exciting opportunities for growth in its downstream sector. Sime Darby Property, with access to strategic landbanks in Malaysia is well-positioned to capitalise on the future potential presented by several exciting national-scale developments. SDB, already the partner of choice for leading brands such as BMW and Caterpillar has a regional footprint that will allow it to strengthen its position even further,' said President and Group Chief Executive Tan Sri Dato' Seri Mohd Bakke Salleh. SDB's Logistics Division owns and operates the largest multi-purpose port in the Yellow River Delta in China's Shandong Province, and its 50% stake in Ramsay Sime Darby Healthcare is a growing business.

The proposals represent the next step in Sime Darby Group's journey to fulfill the aspirations of its shareholders following the mega merger of 2007 that created the current SDB.

'We have to recognise changes in investor expectations. Today's investors seek focus and prefer to invest directly in the sectors of their choice. Furthermore, this is also an opportunity for the three companies to raise capital, chart their distinct growth paths and enhance their profiles to improve performance,' Mohd Bakke said.

SDB will make the appropriate announcement(s) as and when there are material developments relating to the proposals, particularly on the terms and timing of the proposals.