KUALA LUMPUR - Malaysia's Sime Darby Plantation, the world's largest oil palm planter by land holdings, said it has submitted an expression of interest for leading Indian edible oil importer Ruchi Soya.
Ruchi Soya is currently undergoing bankruptcy proceedings under India's National Company Law Tribunal.
"This is preliminary at this point in time. (This is) still subject to due diligence and many other steps before we can come up with an indicative offer price," Sime Darby Plantation Managing Director Mohd Bakke Salleh told reporters at a press conference to announce its second quarter earnings.
Bakke also said Sime Darby Plantation is looking to reduce its ownership in New Britain Palm Oil Limited (NBPOL), its Papua New Guinea arm, to a 51 percent to 60 percent stake.
"In early 2015 before we completed the exercise to buy NBPOL... our intention then was to own anywhere between 51 to 60 percent, but the subsequent outcome of the general offer response... we ended up with 100 percent," said Bakke.
"Our plan to reduce it to 51 to 60 percent is still in place... Ideally it will be better if we can find a strategic investor from Papua New Guinea, that is the preference for us."
Bloomberg had reported last month that Sime Darby Plantation was considering selling 25 percent to 49 percent of NBPOL, seeking a valuation of at least $1.7 billion, the amount it paid when it acquired the company in 2015.
Sime Darby Plantation earlier at noon reported second-quarter net profit gains of 34 percent versus a year ago due to improvements in fresh fruit bunch production (FFB), as it recovers from dry weather caused by the El Nino weather phenomenon.
"Barring any extreme weather abnormalities, the group expects the full year FFB production to improve from the previous financial year as the El Nino effect tapers off in line with increased FFB output in the oil palm industry."
Rising output is largely expected to weigh on palm oil prices, which Bakke forecasts will range between 2,500 and 2,600 ringgit per tonne in the first half of the year.
Palm oil's benchmark contract was down 0.3 percent to 2,482 ringgit ($633.97) a tonne on Thursday.
"The reason why (there will be) no spike in prices is because of good production of soybean in the market," Bakke said.
Palm oil is impacted by movements in rival edible oils such as soyoil since they compete in the global vegetable oils market.
Sime Darby Plantation earlier said Malaysia's three-month suspension on crude palm oil export taxes, along with demand during upcoming holiday periods, will support demand for the tropical oil.