Blackstone in Talks to Buy Sime Darby Assets in Australia

  • Acquisition of property said valued at about A$250 million
  • Sime Darby seeking to sell as part of 'monetization' plan

Blackstone Group LP is in talks to acquire industrial property assets in Australia valued at about A$250 million ($190 million) from Malaysian palm-oil producer Sime Darby Bhd., according to people familiar with the matter.  

The New York-based private equity firm is in discussions to acquire as many as five industrial buildings in Australia, the people said, asking not to be identified because the discussions aren’t public. Blackstone has also agreed to buy a majority stake in three of Sime Darby’s property assets in Singapore valued at about S$300 million ($223 million), the people said.

The conglomerate, Malaysia’s biggest listed palm-oil producer, is looking to sell its property assets in Australia and Singapore in its efforts to pare debt. Chief Executive Officer Mohd Bakke Salleh told reporters at a Feb. 24 briefing in Kuala Lumpur that the company is seeking to raise 1.5 billion ringgit (about $382 million) through sales. 

“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,” Salleh told reporters in February. The asset sales and an Islamic bond issuance will help reduce Sime Darby’s gearing to 54 percent by the fiscal year ending June 30 from 61 percent currently, Salleh said at the time.

"We are working on various options including asset monetization 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 spokeswoman declined to comment on the talks.

Sime Darby shares fell 1.1 percent to 7.53 ringgit at 10:12 a.m in Kuala Lumpur trading Wednesday, compared with the 0.6 percent decline in the benchmark FTSE Bursa Malaysia KLCI Index. The shares have declined 2.8 percent this year.

The properties in Australia are the ones associated with the conglomerate’s industrial unit, Sime Darby Industrial Division, the world’s third-largest Caterpillar dealer. The industrial unit has dealerships across more than 140 branches in 10 countries throughout the Asia Pacific.

The Singapore sale by Sime Darby was reported last week by the Business Times.

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