MKH Oil Palm (East Kalimantan) Berhad which is part of the MKH group has signed an underwriting agreement with M & A Securities Sdn Bhd and Kenanga Investment Bank Berhad for its upcoming initial public offering on the Main Market of Bursa Malaysia Securities Berhad .
MKHOP, an upstream oil palm plantation group, is principally engaged in oil palm cultivation, including the production and sales of crude palm oil and palm kernel. It owns 2 oil palm plantation estates with a total land area of 18,205 hectares, 1 palm oil mill and 1 jetty, all of these are located in East Kalimantan, Indonesia.
Within the plantations, the majority of oil palms are in prime mature stage, representing peak production years between ages of 10 to 16 years. Situated along the equator, the plantations benefit from adequate levels of rainfall and sunshine, creating an optimal climate for oil palm cultivation. The plantation’s operation is further supported by a palm oil mill and a jetty, which eases the logistics management. The plantation estates are strategically located in a prime area, close to the provincial capital of East Kalimantan, Samarinda; the financial centre of Kalimantan, Balikpapan and Indonesia’s new capital, Nusantara.
The IPO exercise entails a public issuance of 220.0 million new ordinary shares, making up 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 3.0% of the enlarged share capital, to selected investors by way of private placement.
Out of the 220.0 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. Of which, 25.6 million shares representing 2.5% of the enlarged share capital will be made available to public investors, with an equal amount designated for Bumiputera public investors. 168.8 million new shares, or 16.5% of the enlarged share capital will be distributed to selected investors via private placement.
Pursuant to the underwriting agreement, M&A Securities and Kenanga Investment Bank Berhad will jointly underwrite 51.2 million new shares made available to the Malaysian Public.
Non-Independent Non-Executive Chairman of MKHOP, Tan Sri Dato’ Chen Kooi Chiew @ Cheng Ngi Chong said, “We are delighted to have signed this underwriting agreement, marking a significant step towards listing MKHOP on the Main Market of Bursa Securities. With access to the broader equity market, MKHOP will be equipped with the necessary resources and flexibility to capitalise on the attractive opportunities ahead.”
MKHOP is scheduled to be listed on the Main Market of Bursa Securities by April 2024, with M&A Securities as the Adviser, Managing Underwriter, Joint Underwriter and Joint Placement Agent of the IPO exercise, while Kenanga Investment Bank Berhad is the Joint Underwriter and Joint Placement Agent. Upon completion of the IPO, MKHOP will be a 63.07% subsidiary of MKH Berhad, from 100.00% currently.
