Golden Agri’s private equity unit has received govt approval a 20-yr concession to develop 202k ha palm oil plantations in Liberia. Financing of this US$1.6bn investment will not be an issue for GGR as the Liberian project will be spread over 10-20 yrs with initial phase of 15k ha. With a low net gearing of 13%, GGR can easily finance the projected annual capex of ~US$80-160m.
Moreover, GGR is also seeking other investors into the equity fund, which means the venture will not be fully financed by GGR. We see this as a good opportunity for GGR to expand beyond Indon given recent remarks by Wilmar that acquiring sizeable land for CPO plantations will be difficult in the future. Stock trades at 13.8x FY10 & 11.6x FY11 P/E, below industry peers. Support is at $0.55.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment