KUALA LUMPUR: Oil palm plantation player MKH Oil Palm (East Kalimantan) Bhd (MKHOP) has signed an underwriting agreement with M&A Securities Sdn Bhd and Kenanga Investment Bank Bhd for its initial public offering (IPO) on the Main Market of Bursa Malaysia Securities.
MKHOP, a wholly owned subsidiary of MKH Bhd, said its listing exercise involves a public issuance of 220 million new shares, representing 21.5% of the group’s enlarged share capital of 1.02 billion shares.
It also involves an offer for sale of 30.7 million existing shares, or 3% of the enlarged share capital, to selected investors by way of private placement, it said in a statement.
“Of the 220 million new shares to be issued, 51.2 million new shares, representing 5.0% of the enlarged share capital will be open for application by the Malaysian public for balloting,” it said.
Of this, 25.6 million shares will be made available to public investors, and an equal amount will be designated for Bumiputera public investors.
Meanwhile, 168.8 million new shares, or 16.5% of the enlarged share capital, will be distributed to selected investors via private placement.
M&A Securities and Kenanga Investment Bank will jointly underwrite the 51.2 million new shares made available to the Malaysian public.
MKHOP owns two oil palm plantation estates with a total land area of 18,205 hectares, a palm oil mill and a jetty, all located in East Kalimantan, Indonesia.
MKHOP chairman Tan Sri Chen Kooi Chiew @ Cheng Ngi Chong said in line with its growth strategy, funds raised from the IPO will be used to expand the plantation landbank by acquiring land located in close proximity to the existing plantation estates.
“Additionally, we will also focus on enhancing our operational efficiency and increasing our processing capabilities and product offerings with new machinery and equipment,” he said.
Moreover, Chen said the group is set to gain from the economic transformation of East Kalimantan, spurred by the development of Nusantara, Indonesia’s new capital city.
MKHOP is scheduled to be listed on the Main Market by April 2024.
On completion of the IPO exercise, MKHOP will be a 63.07% subsidiary of MKH Bhd. – Bernama
