MKH Bhd group executive chairman Tan Sri Alex Chen Kooi Chiew
KUALA LUMPUR: MKH Bhd
has obtained its shareholders' approval for the listing of its wholly owned subsidiary, MKH Oil Palm (East Kalimantan) Bhd (MKHOP) on the Main Market of Bursa Malaysia at an extraordinary general meeting today.
In a statement, MKH said MKHOP’s proposed initial public offering (IPO) 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 RM132mil from the public issue.
MKH said majority or 70.5% of the proceeds raised would 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 RM18.4mil which will be mainly utilised to repay bank borrowings.
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 (CPO) and palm kernel (PK).
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 upcoming listing of MKHOP on the Main Market marks a pivotal step in unlocking the full potential of our investment in MKHOP and enhancing shareholders’ value at MKH’s level.
“Additionally, access to the broader equity market will empower MKHOP with the necessary resources and flexibility to capitalise on the attractive opportunities within the expanding oil palm plantation industry in East Kalimantan,” MKH group executive chairman Tan Sri Chen Kooi Chiew @ Cheng Ngi Chong said.
“A portion of the proceeds from MKHOP’s IPO will be strategically allocated towards the acquisition of plantations or lands for plantation development within close proximity to its existing estates.
“The estates’ strategic positioning within a 100-kilometer radius of Nusantara, the new capital city of Indonesia, places MKHOP in an advantageous position to leverage on the future capital city’s growth. The group is poised to benefit from the economic transformation of East Kalimantan, driven by the development of Nusantara,” he added.
