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MKH Oil Palm IPO Sparks Surge of Interest, Oversubscribed 8.4 Times

KUALA LUMPUR: Oil palm plantation player MKH Oil Palm (East Kalimantan) Bhd (MOPB) has garnered strong investor interest in its upcoming initial public offering (IPO).

MKH Oil Palm (East Kalimantan) Bhd, which launched its prospectus recently, will debut on the main market of Bursa Malaysia on April 30.

Shares has been oversubscribed by 8.4 times ahead of its listing on the main market of Bursa Malaysia.

MOPB’s IPO received 9,510 applications for 482.9 million shares, worth around RM299.4 million.

The Malaysian public oversubscribed by 8.4 times, while Bumiputera category sees a 7.6 times oversubscription, and other Malaysian public category reaches 9.3 times.

The private placement of 168.8 million shares for selected investors have also been fully placed out.

MOPB non-independent non-executive chairman Tan Sri Datuk Chen Kooi Chiew expressed gratitude for the favourable response to the company’s balloting results.

“We value the public’s support for the company’s capabilities and future potential.

“With the IPO funds, we are well-equipped to pursue our expansion strategy, which includes acquiring new land in the vicinity of our existing plantation estates to expand our plantation landbank,” he said in a statement.

MOPB’s IPO exercise comprises a public issue of 220.0 million shares at an issue price of RM0.62 per share, representing
21.5 per cent of its enlarged share capital, with IPO proceeds of RM136.4 million.

Additionally, there is also an offer for sale of 30.7 million existing shares or 3.0 per cent of the enlarged shares by way of private placement to selected investors.

“Our efforts will be directed towards enhancing our operational efficiency and increasing our processing capabilities and product offerings, supported by investments in new machinery and equipment.

“A key initiative includes the new palm kernel (PK) crushing facility to crush and press PK for extraction and processing into crude palm kernel oil and palm kernel expeller, thereby diversifying our revenue streams,” Chen said.

MOPB will debut on the main market of Bursa Malaysia on April 30, 2024.

Upon listing, the company’s market capitalisation will be RM634.6 million, based on the issue price of RM0.62 per ahare and its enlarged share capital of 1.02 billion shares.

M&A Securities Sdn Bhd is the adviser, managing underwriter, joint underwriter and joint placement agent of the IPO exercise, while Kenanga Investment Bank Bhd is the joint underwriter and joint placement agent, and AmInvestment Bank Bhd is the joint placement agent.

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