Blackstone 'eyeing Sime Darby assets'

SINGAPORE • Private equity firm Blackstone Group is in talks to acquire industrial property assets in Australia valued at about A$250 million (S$253.6 million) from Malaysian palm oil producer Sime Darby Bhd, according to people familiar with the matter.  

New York-based Blackstone is in discussions to acquire as many as five industrial buildings in Australia, the people said, asking not to be identified because the discussions are not public. Blackstone has also agreed to buy a majority stake in three of Sime Darby's property assets here valued at about $300 million, it was reported last week. Malaysia's biggest listed palm oil producer is looking to sell property assets in Australia and Singapore in its efforts to pare debt. 

Chief executive Mohd Bakke Salleh told reporters at a Feb 24 briefing in Kuala Lumpur the firm is seeking to raise RM1.5 billion (S$508 million) through sales, adding: "In Australia, we have 13 properties and in Singapore we have three. We are looking at disposing off office buildings and industrial properties in the two countries."

The asset sales and an Islamic bond issuance will help reduce Sime Darby's gearing to 54 per cent by the fiscal year ending June 30 from 61 per cent currently, he had said at the time.

"We are working on various options including asset monetisation to help manage the gearing level," Sime Darby said in an e-mailed statement on Tuesday, declining to comment on any talks with Blackstone. A Blackstone spokesman declined to comment on the talks.

Sime Darby shares fell 1.1 per cent to RM7.71 at the close of Kuala Lumpur trading yesterday. The shares have fallen 2.8 per cent this year.

The properties in Australia are the ones associated with its industrial unit, Sime Darby Industrial Division, the world's third largest Caterpillar dealer.

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A version of this article appeared in the print edition of The Straits Times on May 05, 2016, with the headline 'Blackstone 'eyeing Sime Darby assets''. Print Edition | Subscribe