MKH Bhd has gained shareholder approval for the main market listing of its wholly-owned subsidiary, MKH Oil Palm (East Kalimantan) Bhd (MKHOP).
MKHOP is a vertically integrated oil palm company operating in East Kalimantan, Indonesia.
The proposed initial public offering (IPO) involves a public issue of 220 million new shares (21.5% of its enlarged share capital) and an offer for sale of 30.7 million existing shares.
With an indicative IPO price of 60 sen per share, MKHOP aims to raise RM132 million, primarily for expanding the oil palm plantation business.
“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.
The IPO is expected to be completed by Q1 2024, reducing MKH’s shareholding in MKHOP to 63.07%. – TMR