MKH Berhad has obtained the approval of its shareholders for the proposed listing of its wholly owned subsidiary, MKH Oil Palm Berhad on the Main Market of Bursa Malaysia Securities Berhad.
MKHOP is a vertically integrated oil palm company principally involved in the cultivation of oil palm, as well as the production and sale of crude palm oil and palm kernel. The Group operates two estates in East Kalimantan, Indonesia, with a total land area of 18,205.3 hectares. 93.4% of this land, or 17,008.8 hectares, is planted with oil palm trees, and is supported by a palm oil mill and a jetty.
The proposed initial public offering comprises a public issue of 220.0 million new shares, representing 21.5% of its enlarged share capital. Additionally, there is a proposed offer for the sale of 30.7 million existing shares by MKH’s wholly-owned subsidiary, Metro Kajang (Oversea) Sdn Bhd, representing 3.0% of the enlarged share capital.
Based on an indicative IPO price of 60 sen per share (final IPO price to be determined at a later stage), MKHOP aims to raise RM132.0 million from the public issue, where majority or 70.5% of it will be used for expanding the oil palm plantation business and optimising fresh fruit bunch harvesting and palm oil milling activities. From the offer for sale, MKH will raise RM18.4 million which will be mainly utilised to repay bank borrowings.
Group Executive Chairman of MKH, Tan Sri Dato’ Chen Kooi Chiew @ Cheng Ngi Chong, said, “We are pleased to have received approvals from our shareholders for the proposed listing of MKHOP. The upcoming listing of MKHOP on the Main Market marks a pivotal step in unlocking the full potential of our investment.
During the nine months ended 30 June 2023 (“9MFY2023”), MKH recorded profit before tax (“PBT”) of RM86.5 million (9MFY2022: RM146.9 million) on the back of RM750.8 million (9MFY2022: RM708.7 million) in revenue. The plantation segment, the second largest contributor to MKH’s performance, generated RM244.8 million in revenue (or 32.6% of MKH’s total revenue) during the period under review, marginall lower than the RM251.3 million.
The proposed IPO of MKHOP is expected to be completed by the first quarter of 2024. Upon completion, MKH’s shareholding in MKHOP will reduce to 63.07%, from 100.0% currently.
