MAJOR IPO: Malaysia’s Prime Minister Najib Razak shouts ‘Long Live Felda’ at the end of his speech to farmers at the Felda Jengka 8 plantation, near the town of Jerantut, 170 km (106 miles) east of Kuala Lumpur in this file photo. Malaysian plantation operator FGV is expected to begin the book-building process for its US$3 billion initial public offering on May 31, 2012.
KUALA LUMPUR: Felda Global Ventures Holdings Bhd (FGV), the world’s third largest oil palm operator, yesterday launched the prospectus for its initial public offering (IPO).
The company’s shares were expected to be listed on the main market of Bursa Malaysia Securities Bhd on June 28, 2012.
Under the IPO, FGV would offer up to 2.19 billion ordinary shares to Malaysian and foreign institutional investors including Bumiputera investors approved by the Ministry of International Trade and Industry as well as retail investors.
The retail portion of the IPO consisting of 273.61 million shares would be priced at the lower of RM4.55 or 98 per cent of the institutional offer price, whichever was lower.
The institutional price would be determined by way of a book-building process.
Prime Minister Datuk Seri Mohd Najib Tun Abdul Razak launched the prospectus.
FGV group president, Datuk Sabri Ahmad, said the listing was a milestone for the company as it moved forward to transform from a Malaysian champion into a leading regional conglomerate and multinational business.
“A portion of the IPO exercise is expected to be used for capital expenditure to increase efficiency as well as extension of capabilities, acquisitions of plantations, expansion of downstream activities and other working capital requirements,” he said at the launch of the prospectus here yesterday.
The strategic initiatives to improve efficiency include extensive oil palm replanting programme to improve age profile at approximately 15,000 hectares per year utilising Felda’s award-winning planting materials to increase fresh fruit bunch production and improve oil extraction rate.
The proceeds would also be used for potential acquisitions of additional land bank in South-East Asia and Africa for planting oil palm and rubber by 2015.
Meanwhile, Felda would expand downstream capabilities to enhance value of its upstream products.
This included further acquisitions and investments in refinery assets, consumer packed plants and bulking facilities.
At the same time FGV would continue to focus on upstream and downstream research and development in maintaining business sustainability.
Meanwhile, CIMB Investment Bank Bhd chief executive officer, Datuk Charon Wardini Mokhzani, said the listing of FGV would make it the largest IPO in Asia this year, the largest IPO in the world this year after Facebook and the largest IPO in Malaysia since Petronas Chemical Group in November 2010.
He said up to 2.3 billion shares, representing 63 per cent of the company’s enlarged share capital of 3.65 billion shares were being offered: 1.3 billion by way of an offer for sale by Felda and 980 million through a public issue by the company.
Institutional investors were being offered 1.9 billion shares, or 52.5 per cent of the enlarged capital, out of which 723.5 million shares (19.8 per cent) of the enlarged capital had been allocated to cornerstone investors.
Another 395.6 million shares (10.8 per cent) to state governments,91.2 million shares (2.5 per cent) to strategic investors, 419.5 million shares (11.5 per cent) to Bumiputera institutional and selected investors approved by Ministry of International Trade and Industry.
The remaining 285.4 million shares (7.8 per cent) for institutional investors.
“There is an over-allotment option of 109.4 million shares, or three per cent,” he said.
Charon said eligible settlers and employees had a preferential allocations at the retail price of up to 200.6 million shares, or 5.5 per cent, through blue and pink forms.
“Retail investors are offered 73 million shares, or two per cent, and the retail price is RM4.55 per share or a two per cent discount to the final institutional price, whichever is lower, he said.
“By any measure this is a major global IPO.
Assuming a retail price of RM4.55, the offering will raise approximately RM10.5 billion for both Felda Global and Felda and will give Felda Global a market capitalisation in excess of RM16 billion. — Bernama