KUALA LUMPUR (April 20): MKH Oil Palm (East Kalimantan) Bhd (MKHOP), the plantation arm of property developer MKH Bhd, is offering up to 250.7 million shares in an initial public offering (IPO) as it seeks to raise funds for business expansion via its listing on Bursa Malaysia’s Main Market.
The 250.7 million shares — 24.5% of its enlarged issued share capital of 1.023 billion — comprise 220 million new shares and an offer for sale of 30.7 million existing shares, its draft prospectus published on the Securities Commission Malaysia website showed.
A total of 51.21 million shares out of the 220 million new shares are allocated to the Malaysian public, of which 25.6 million issue shares will be set aside for Bumiputera public investors. Another 168.79 million shares out of the 220 million new shares are for private placement to selected investors.
The offer shares of 30.7 million will be allocated by way of private placement to selected investors.
MKHOP is principally involved in investment holding and management services. Through its subsidiaries, the group is involved in cultivation of oil palm and production and sale of crude palm oil (CPO) and palm kernel. On Aug 11, 2022, MKHOP was converted into a public company limited by shares.
MKHOP is formerly known as MKH Global Plantation Sdn Bhd and Detik Merdu Sdn Bhd. MKH directly holds 56.73% stake in MKHOP, while the remaining 43.72% is indirectly held via MKH’s wholly owned Metro Kajang (Oversea) Sdn Bhd.
After the IPO, MKHOP is projected to be 63.07%-owned by MKH and subsidiaries, followed by the Malaysian public and selected investors (27.95%), entitled shareholders (4.6%), PT Hikmat Aliran Sukses (3.93%) and Ivakijaya Sdn Bhd (0.45%).
For the financial year ended Sept 30, 2022 (FY2022), MKHOP posted a profit after tax of RM60.14 million, versus RM77.45 million in FY2021 and RM18.69 million in FY2020. As for revenue, the company logged RM315.82 million in FY2022, RM306.61 million in FY2021 and RM282.324 in FY2020.
“For FY2020 to FY2022, the sale of CPO was the largest revenue contributor to our group as it contributed 79.9%, 85.9% and 87.3% to our group’s revenue, respectively. Our group’s business activities were largely based in Indonesia,” it wrote in its prospectus exposure.
Among MKHOP’s business strategies over the period of 24 months from the date of listing, the group plans to expand its oil palm plantation business by acquiring additional land located in close proximity to its current oil palm plantation estates in Kutai Kartanegara, East Kalimantan, for better coordination of operational and logistics management.
“We intend to purchase new machinery and equipment to enhance the efficiency of our FFB (fresh fruit bunches) harvesting activities and palm oil milling activities for the production of CPO and palm kernel which will eventually improve the financial performance of our group,” MKHOP added.
MKHOP presently does not have any formal dividend policy. During FY2020 to FY2022, there were no dividends declared and paid to shareholders of MKHOP and its subsidiaries.
M&A Securities Sdn Bhd has been appointed as the principal adviser for the IPO.