PRICEWORTH SIGNS LOG SUPPLY AGREEMENT, YAYASAN SABAH’S INNOPRISE GETS BOARD REPRESENTATION AND RIGHT TO APPOINT CEO
KOTA KINABALU, 7 OCTOBER 2019: Priceworth International Bhd has signed a log supply agreement with Innoprise Corporation Sdn Bhd’s subsidiary Rakyat Berjaya Sdn Bhd, following the terms of the memorandum of understanding (MOU) signed on 3 September.
Under the agreement signed today, Priceworth will receive logs worth up to a 30 percent stake and to be paid for via an issue of new shares. Priceworth may negotiate a further log supply agreement once it has received all the logs under the agreement signed today.
At the same time, Innoprise, the investment holding vehicle of state-owned Yayasan Sabah, will be entitled to appoint two directors to the board, and has the right to appoint the Chief Executive Officer, Priceworth said in an announcement to Bursa Malaysia.
Innoprise may nominate and appoint two non-independent non-executive directors and a chief executive officer upon the issue of the new shares following the completion and acceptance of a due diligence exercise within two months from the date of the agreement, the company said.
“With this, the PWI Group will resume logging activities in the Yayasan Concession areas which will ensure a constant Log Supply for the PWI Group’s Plywood and Sawn timber mills. PWI also looks forward to the resumption of logging operations in Forest Management Unit (FMU) 5,” says executive director Richard Koo.
Priceworth and Yayasan Sabah will foster more downstream activities in Sabah’s timber industry, while complementing each other’s strengths in Sustainable Forest Management. This partnership supports the call of Chief Minister Datuk Seri Panglima Mohd Shafie Apdal to create more employment opportunities for the people of Sabah and is aimed at helping Sabah’s timber industry move up the value chain and produce higher value wood products.
“While this agreement would not have any material effect on the company for this financial year ending 2020, we expect this agreement to contribute positively to Priceworth’s bottom line as soon as the next financial year,” he continued.
Priceworth has been working on expanding its downstream operations, which included a new line for the production of container flooring. The resumption of Priceworth’s operations and a sustainable supply of raw material would enable the contribution of higher value-added products to the state’s exports.
For more details, please refer to the company’s announcement to Bursa Malaysia at http://www.bursamalaysia.com/market/listed-companies/company-announcements/