Why would a solidly run company dispose off a key contributor to the Malaysian arm of its food commodities business? Why sell off it's market dominance in Malaysia? That is so very unlike Robert Kuok.
Kuok isn't called "The Sugar King" for nothing. Well, he's still got his sugar interests outside of Malaysia.
This is a nuanced post because the transaction is nuanced.
PPB said it will dispose of its entire 36.36 million shares of RM1 each in Malayan Sugar Manufacturing Co Bhd (MSM) to Felda Global Ventures Holdings Sdn Bhd, a wholly-owned unit of Felda.
It is also selling its 50 per cent stake, or six million shares of RM1 each, in Kilang Gula Felda Perlis Sdn Bhd to Felda Global Ventures for RM26.31 million.
Felda Holdings Bhd already holds a 50 per cent stake in the company, which is involved in sugar cane milling and refining of domestic and imported raw sugar.
The group said the disposal of these three assets will help it realise its investments with a substantial gain.
Meanwhile, its 49 per cent-owned associate Grenfell Holdings Sdn Bhd will sell its stake in plantation group and sugar refiner Tradewinds (M) Bhd for RM207.53 million.
Tradewinds is controlled by businessman Tan Sri Syed Mokhtar Al-Bukhary.
According to PPB's 2008 annual report, MSM and Kilang Gula Felda Perlis produced more than 750,000 tonnes of refined sugar, supplying some 60 per cent of the domestic sugar requirements last year.
Its sugar refining and cane plantation business contributed 27 per cent to the group's revenue of RM3.46 billion and 36.5 per cent to its operating profit of RM431.2 million in the fiscal year ended December 31 2008.
This makes the business its second largest contributor, after its grains and feed business.