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BTM Resources inks sublease agreement to support biomass energy business



KUALA LUMPUR, Jan 20 -- BTM Resources Bhd has proposed to sublease about 2,255.33 hectares of secondary forest land -- Block 10 and Block 11A in Kemaman, Terengganu for 63 years from SPPT Development Sdn Bhd (SPPT) for about RM24.7 million.

The proposed sublease is undertaken as part of the group’s venture into the biomass energy business, which will improve the group's revenue and earnings, as well as reduce its reliance on existing core businesses, BTM Resources said in a filing to Bursa Malaysia.

Following this, its wholly-owned subsidiary, BTM Biomass Products Sdn Bhd (BTMBP) has entered into a conditional sublease agreement in respect of the assignment of all SPPT’s rights, interest and title in and to the plantation lands to BTMBP.

The sublease consideration will be fully funded via the funds to be raised from its proposed renounceable rights issue together with free detachable warrants (Warrants-C), it said.

The rights issue is expected to raise between RM60 million and RM88.80 million.

In addition, the group has also proposed the establishment and implementation of a long-term incentive plan (LTIP) of up to 15 per cent of the company’s total issued share capital for eligible directors and employees.

The proposed LTIP comprises an executive share grant scheme and an employees’ share option scheme.

‘’Upon completion of the proposed sublease, BTMBP shall undertake the plantation programme on the plantation lands and is expected to incur a total capital expenditure of RM81.95 million over the plantation programme period of 34 years, which is equivalent to an average annual plantation expenditure of about RM2.41 million per annum,’’ it said.

The proposed sublease will allow the group to undertake a plantation programme to establish fast growing Acacia mangium plantation, which is suitable as raw material to produce fuel woods to be utilised as raw materials or feedstock to generate electricity from the biomass power plant, it added.

-- BERNAMA





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