Main-Market bound MKH Oil Palm’s IPO oversubscribed by 8.43 times

KUALA LUMPUR (April 19): MKH Oil Palm (East Kalimantan) Bhd’s initial public offering (IPO) has been oversubscribed by 8.43 times ahead of its listing on the Bursa Malaysia Main Market on April 30.

The 51.2 million IPO shares made available for the Malaysian public received a total of 9,510 applications for 482.88 million issue shares, valued at RM299.39 million, representing an overall subscription rate of 8.43 times, according to its statement on Friday.

For the Bumiputera portion, a total of 4,628 applications for 220.24 million shares were received, which represents an oversubscription rate of 7.60 times. For the public portion, a total of 4,882 applications for 262.64 million shares were received, which represents an oversubscription rate of 9.26 times.

Meanwhile, the joint placement agents have confirmed that the 168.79 million issue shares and 30.7 million offer shares made available by way of private placement to selected investors, have been fully placed out.

The notices of allotment will be posted to all successful applicants on April 26.

MKH Oil Palm, the plantation arm of property developer MKH Bhd, aims to raise up to RM155.43 million from its Main Market IPO. Based on the IPO price of 62 sen apiece, the group will have a market capitalisation of RM634.6 million.

For the financial year ended Sept 30, 2023 (FY2023), the company’s net profit dropped 45% to RM30.4 million, from RM55.5 million previously (FY2022), due to rising operating costs amid an increase in operational activities, driven by more favourable weather conditions.

FY2023 revenue rose 7% to RM337.98 million, from RM315.82 million in FY2022, contributed 100% by sales derived in Indonesia.

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

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