PETALING JAYA: Oil palm plantation operator MKH Oil Palm (East Kalimantan) Bhd (MKHOP) is seeing strong investor interest in its upcoming initial public offering, which is oversubscribed by 8.4 times.
The group is listed on the main market of Bursa Malaysia Securities. The IPO comprises a public issue of 220 million new ordinary shares at an issue price of 62 sen each, representing 21.5% of the enlarged share capital, with expected proceeds of RM136.4 million.
In addition, there is an offer to sell 30.7 million existing shares (offer shares) or 3% of the expanded shares by way of a private placement to selected investors.
MKHOP received a total of 9,510 applications for 482.9 million shares worth about RM299.4 million for the 51.2 million shares allocated to the Malaysian public, representing an 8.4 times oversubscription rate.
The Bumiputera category received a total of 4,628 applications for 220.2 million shares, representing an oversubscription rate of 7.6 times. Malaysia's other public category received 4,882 applications for 262.6 million shares, representing an oversubscription rate of 9.3 times.
The private placement of 168.8 million shares for selected investors has now been fully completed.
Allocation notifications will be sent to all successful applicants by Friday.
MKHOP non-independent non-executive chairman Tan Sri Chen Kooi Chiew @ Cheng Ngi Chong has expressed gratitude for the positive response to the group's IPO.
“We appreciate public support for our group’s capabilities and future potential. With the IPO funds, we are well-equipped to continue our expansion strategy, which includes acquiring new properties close to our existing plantation properties to expand our plantation land bank.”
In addition, he said, efforts will be directed at improving operational efficiency and expanding processing capabilities and product offerings, supported by investments in new machinery and equipment. An important initiative includes the new plant for crushing and pressing palm kernels to process them into raw palm kernel oil and palm kernel expellers, thereby diversifying the group's revenue streams.
MKHOP is expected to debut on Bursa Securities on April 30. Post-listing, its market capitalization will be RM634.6 million based on the issue price of 62 sen per share and its increased share capital of 1.02 billion shares.