Priceworth International Bhd’s cash option to acquire timber concession area FMU5 in Sabah at a discounted RM235 million has been extended until May 22, the day of the shareholder meeting called to approve its proposed acquisition.

The sustainable forest management group today signed a supplemental letter with vendor Transkripsi Pintar Sdn Bhd in respect of the October 2016 sale and purchase agreement to buy Forest Management Unit 5 (FMU5), extending the option period 

The cash option represents a discount of RM25 million on the original RM260 million purchase price for FMU5 which has been valued at RM433.8 million. FMU5 is a sustainable forest management concession with a net concession area of 88,920 ha of commercial Class II forest in Sabah’s Trus Madi forest reserve.

"We appreciate the vendor’s understanding and patience with the acquisition process.

"FMU5 represents a game-changing acquisition which will provide Priceworth with a sustainable supply of logs to support our downstream businesses," said Priceworth International Bhd executive director Richard Koo.

Priceworth is acquiring FMU5 through its Singapore subsidiary GSR Pte Ltd, which will also be acquiring sister company Sinora Sdn Bhd, Priceworth’s plywood manufacturing arm. The group is also planning an initial public offer (IPO) of GSR on the Singapore Exchange (SGX),

The group has seen its first half net profit more than triple on rising contribution from operations in FMU5, to RM4.78 million.

Last month, it saw its highest production volume since 2011 when Sabah adopted a new sustainable forestry policy in 2010. Its log production in March was almost 25,000 cbm, 71 per cent higher than a year ago.

The timber group also signed a Memorandum of Understanding (MOU) to supply Container Flooring totalling RM600 million over a five year period averaging RM120 million per annum to Chinese manufacturer Foshan Zhengsen Woodworking Co which has been made possible due to the supply of timber from FMU 5.

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