Matang hopes to raise RM16.9m from IPO

KUALA LUMPUR: Plantation firm Matang Bhd, which is en route to the ACE Market of Bursa Malaysia Securities Bhd on Jan 17, 2017, expects to raise RM16.9 million from its initial public offering (IPO) exercise.
The company is principally involved in the management of plantation estate, sale of fresh fruit bunches (FFB) and property investment holding.
The Malaysian Chinese Association (MCA) has a 12.09% stake in Matang, held via Rohua Sdn Bhd and Huaren Holdings Sdn Bhd. Post-IPO, its holding will be trimmed to 11.22%, according to the IPO document.
Speaking at the prospectus launch here yesterday, Matang chairman Datuk Teh Kean Ming said the group’s IPO exercise is well timed with the recovery in crude palm oil (CPO) prices after the severe El Nino earlier this year which had affected output.
“As you may be aware, to get to this day, it has been a busy two years for all of us in Matang,” he said.
The group’s listing exercise comes after its previously long-stalled plan to inject its plantation assets into ACE Market-listed Scope Industries Bhd was called off in September 2014 after the extension of time granted by the regulator to complete the proposed merger lapsed.
“With the IPO, our 18,629 loyal shareholders who collectively own 1.68 billion Matang shares will have a platform to partake in the growth of a listed plantation business, while having the flexibility to realise returns with the liquidity generally available to shares listed on the stock exchange,” Teh said.
Of the IPO proceeds, RM11.92 million will be used for general working capital requirements to finance the group and its subsidiaries’ operations over the next five years, RM2.55 million for capital expenditure, RM250,000 for replanting exercise and RM2.18 million for listing expenses.
Matang will be issuing 130 million new shares to be offered to the Malaysian public via public balloting at the issue price of 13 sen per share.
Teh said he is optimistic on the group’s prospects due to the positive outlook for the plantation industry, noting that CPO prices have been trending up since late last year to the current level of about US$650 per tonne.
“With the majority of oil palm trees in Matang Estate in the peak production ages between five and 20 years, we believe that Matang is in the position to capitalise on the demand growth for oil palm FFB due to attractive CPO prices,” he added.
The groups plantation operation, Matang Estate, comprises 45 contiguous pieces of agricultural land within the districts of Ledang and Segamat, Johor, covering a total of 1,096.3 hectares.
Asked whether the group is still open to mergers and acquisitions (M&As), Teh said the group will not decline any possible M&A if the opportunity arises, but does not expect it to happen in the immediate future.