Integrated palm oil milling services provider, Ecoscience International Bhd launched its prospectus in conjunction with its initial public offering (“IPO”) and listing on the ACE Market of Bursa Malaysia Securities Berhad (“Bursa Securities”).
Ecoscience, via its subsidiaries (collectively referred to as the “Group”), is a one-stop solution provider and turnkey contractor for the construction of plants and facilities for palm oil mills and plantations with in-house fabrication capabilities of palm oil milling equipment.
The Group has an established track record of approximately 18 years, having completed the construction of palm oil mills, palm oil refineries, biodiesel plants, biomass plants, and biogas plants, as well as upgrading works for existing palm oil mills. Besides that, it is also involved in building supporting facilities for palm oil mills and other industries comprising, amongst others, workers’ quarters, laboratories, offices, and schools.
Geographically, Ecoscience has amassed vast experience beyond local shores, having completed projects in overseas markets including Indonesia, Gabon, Liberia, and India. Its clientele encompasses multinational corporations and large global resources companies such as Olam Group Limited and Kuala Lumpur Kepong Berhad.
Managing Director of Ecoscience International Berhad, Mr. Wong Choi Ong said, “Particularly due to its contribution to the global food supply, the palm oil industry is regarded as a resilient sector.
As a supporting service provider to this industry, Ecoscience has benefitted and grown over the past 18 years because of that. The future of the industry continues to be positive based on the global consumption of CPO which grew at a CAGR of 2.5% between 2018 and 2020.”
“From the total proceeds of RM24.7 million to be raised, we plan to allocate RM5.0 million for the incorporation of a wholly-owned subsidiary in Indonesia and the establishment of a new fabrication facility and office located at Balikpapan in East Kalimantan province, Indonesia.
With the increase in upstream activities and Indonesia being the world’s largest palm oil producer, the move will put us in a stronger position to capitalise on the uptrend. The said expansion is expected to shorten the response time to requests from our Indonesian customers and reduce our shipping costs.
Furthermore, having a fabrication facility in Indonesia also enhances the Group’s prospects in securing new contracts for the expansion or development of palm oil plants and facilities or other related sectors there.”
“At the same time, RM1.0 million will be set aside to expand our environmental and energy efficiency business with the purchasing and leasing of non-chemical water treatment equipment for use in palm oil and other industries. This will give the Group a recurring revenue stream while providing a platform for us to diversify our customer base to other sectors,” Mr. Wong added.
Ecoscience aims to raise approximately RM24.7 million from the IPO exercise, which is expected to be utilised in the following manner:
Utilisation of Proceeds RM million Proportion Business expansion (i) Establishment of new fabrication facility and office in Indonesia 5.0 20.3% (ii) Expansion of environmental and energy efficiency business 1.0 4.1% Working capital 7.9 31.8% Repayment of bank borrowings 7.0 28.4% Estimated listing expenses 3.8 15.4% Total 24.7 100.0%
Ecoscience’s IPO offering of 112.2 million issue/offer shares, representing 33.0% of the enlarged share capital, comprises a public issue of 82.2 million new shares and an offer for sale of 30.0 million existing shares (collectively known as “IPO Shares”) in the following manner:
- 17.0 million IPO Shares available for the Malaysian Public;
- 6.8 million IPO Shares available for the eligible Directors, employees, and persons who have contributed to the success of Ecoscience;
- 42.5 million IPO Shares by way of private placement to identified Bumiputera investors approved by the Ministry of International Trade and Industry (“MITI”); and
- 45.9 million IPO Shares by way of private placement to selected investors.
At an issue price of RM0.30 per share and an enlarged share capital of 340.0 million shares upon listing, Ecoscience will have a market capitalisation of RM102.0 million.
Pursuant to the launch of Ecoscience’s prospectus, applications for the Public Issue are open today and will close on 1 July 2022 at 5.00 p.m. Ecoscience is scheduled to be listed on the ACE Market of Bursa Securities on 18 July 2022.
