MKH Oil Palm (East Kalimantan) Berhad has successfully launched its prospectus in conjunction with its upcoming initial public offering on the Main Market of Bursa Malaysia Securities Berhad.
The company which is part of MKH Holdings operates two oil palm plantations totalling 18,205.3 hectares in East Kalimantan, Indonesia, supported by an on-site palm oil mill and jetty. The plantations are Indonesian Sustainable Palm Oil certified, reflecting the Group’s sustainable plantation practices.
Non-Independent Non-Executive Chairman of MKHOP, Tan Sri Dato’ Chen Kooi Chiew @ Cheng Ngi Chong said, “The IPO proceeds will accelerate our growth plans, which include expanding our plantation landbank by acquiring lands located near our existing estates to leverage on our existing processing and jetty facilities. We will also invest in new machinery and equipment to enhance operational efficiency, increase processing capabilities, and broaden our product offerings,” he added.
The upcoming IPO exercise is set to raise RM136.4 million. RM42.0 million or 30.8% of the IPO proceeds will be used to acquire lands for oil palm plantation within the East Kalimantan province while RM9.0 million or 6.6% will be allocated for the setting up of a PK crushing facility to provide the Group with an additional income stream. Capital expenditure for existing plantations lands; refurbishment and/or upkeep of existing palm oil mill; refurbishment and construction of workers/staff housing quarters; and expansion of electricity supply will use up RM42.0 million or 30.8% of the amount raised.
RM30.0 million or 22.0% of the IPO proceeds will go towards repayment of loan due to a related party. The rest, totalling RM13.4 million or 9.8%, will be deployed as working capital and listing expenses.
The Group’s IPO exercise comprises a public issue of 220.0 million new ordinary shares in MKHOP, or 21.5% of its enlarged share capital, and an offer for sale of 30.7 million existing Shares, or 3.0% of the enlarged shares by way of private placement to selected investors.
Out of the 220.00 million new Shares, 51.21 million new Shares will be made available for application by the Malaysian public via balloting, while the remaining 168.79 million new Shares, are reserved for private placement to selected investors.
With an enlarged issued share capital of 1.02 billion Shares and an IPO price of RM0.62 per Share, MKHOP will have a market capitalisation of RM634.6 million upon listing.
In terms of dividend policy, the Group intends to recommend and distribute a dividend of at least 50% of its annual net profit.
Following the prospectus launch, applications for the public issue are open from today and will be closed on 16 April 2024 at 5:00 pm. The Group is targeted to be listed on the Main Market of Bursa Securities on 30 April 2024.
