KUALA LUMPUR (Aug 16): PLS Plantations Bhd intends to invest RM50 million into a 51:49 joint venture with one Landasan Erajaya Sdn Bhd to undertake cash crops plantation activities over land areas located in Pahang.

Both parties have agreed to enter into a definitive agreement within 30 days upon completion of due diligence, with an automatic extension of another 30 days, said PLS Plantations in a stock exchange filing on Tuesday (Aug 16).

Under the collaboration, PLS will have a 51% share of net earnings generated from the sale of the harvested cash crops, agriculture and aquaculture, and the remaining 49% will belong to Landasan Erajaya.

The group, which is 73%-controlled by Tan Sri Lim Kang Hoo via Ekovest Bhd, said if the collaboration materialises, Landasan Erajaya will utilise the RM50 million from PLS to undertake intercrop and cash crops plantation activities, including construction, operation, planting, farming or maintenance works.

Cash crops are agricultural crops that are planted to make profit, while intercropping is by growing two or more cash crops together.

PLS said the collaboration allows it to expand into intercropping and cash crops plantation, which would enhance cash flows by optimising its large tracts of land assigned for forest plantation.

Astramina Advisory Sdn Bhd is PLS's appointed financial advisor for the proposed collaboration.

PLS did not say how it will finance the RM50 million investment. As at end-March this year, its cash and cash equivalents stood at RM35.66 million, with RM6.27 million in fixed deposits with licensed banks.

PLS shares closed unchanged at 93 sen per share on Tuesday, giving it a market capitalisation of RM371.68 million.