KUALA LUMPUR: GOLDEN Palm Growers Bhd, (GPGB) is expected to raise as much as RM240 million by the end of next year if it sells all 70 per cent of the lots offered under its palm oil investment scheme.
"As the management company, we hold a 30 per cent stake, or 13,200 lots," GPGB executive chairman Andrew Phang told a media briefing here yesterday.
"So far, we have sold some 15,000 lots. There are still another 15,000 lots available for subscription. We are quite optimistic that they will be fully taken up by end-2013," he added.
GPGB, which is part of the Australian Stock Exchange-listed Sterling Biofuels International Ltd, holds a 90-year concession to develop and manage a 4,566.8ha plot in Gua Musang for 60 years, with an option to renew it for another 30 years, from the Kelantan government.
So far, it is one of two interest schemes registered with the Companies Commission of Malaysia that invest in the oil palm business.
Licensed trustee AmTrustee Bhd acts as trustee for investors while profits are audited by international audit firm Ernst & Young.
When asked on the difference between GPGB's scheme with that of Country Heights Grower Scheme, Phang replied: "Our's is the only licensed scheme that distribute 100 per cent of audited net profits to investors."
Subscribers to GPGB can invest a minimum of RM8,000 per lot. For this, they are guaranteed to receive a six per cent return annually for the first six years.
Once the plantation starts to mature from the seventh year, investors will enjoy a share of plantation profits, or a minimum dividend of nine per cent, if the average annual palm oil price exceeds RM1,500 per tonne. Should palm oil prices drop below RM1,000 per tonne, there will not be any payout.
Phang said once an investor subscribes to the scheme, he can change his mind within the first 10 days. "He is entitled to a full refund. The prospectus allows for such a cooling period."
He said as the scheme is categorised as medium risk and medium reward, investors are advised not to pull out within the first six years.
"The investor is not allowed to withdraw within the first year. But if the investor still want to pull out from the second to sixth year, he is unlikely to get back in full what he has put in because he needs to be able to sell his lots to other subscribers on a willing-buyer-willing seller basis," said Phang.
"By the seventh year, we have a buyback scheme to repurchase investors' plots. But it has to be at the original purchase price," he added.
On risks management, Phang said the company takes precaution against the deadly ganoderma disease by practising good agriculture practice.