Matang Bhd expects to raise RM16.9 million from IPO
KUALA LUMPUR: Matang Bhd, which is enroute to a tentative listing on the Ace Market of Bursa Malaysia on Jan 17, 2017, expects to raise RM16.9 million from the initial public offering (IPO).
Of the RM11.92 million proceeds for day-to-day operational expenses, it is estimated that RM9 million will be for fertiliser purchase over the next five years to ensure optimal level of fresh fruit bunches (FFB). Datuk Teh Kean Ming, Matang Bhd chairman
Chairman Datuk Teh Kean Ming said proceeds from the issuance of 130 million new shares will put Matang on a firmer footing with new equity and the financial flexibility to pursue growth opportunities.
The new shares of par value of 10 sen each, is being made available to the Malaysian public via public balloting at an issue price of 13 sen per share.
Of the total IPO proceeds, RM11.92 million (70.5 per cent) will be used primarily for general working capital requirements to finance the day-to-day operations of subsidiaries over the next five years.
“Of the RM11.92 million proceeds for day-to-day operational expenses, it is estimated that RM9 million will be for fertiliser purchase over the next five years to ensure optimal level of fresh fruit bunches (FFB),” Teh told reporters after the launch of the company prospectus yesterday.
About RM2.55 million or 15.1 per cent is for capital expenditure, while RM250,000 (1.5 per cent) is for a replanting exercise to improve the Matang Estate oil palm trees age profile and RM2.18 million (12.9 per cent) for listing expenses.
Based on the enlarged issue and paid-up share capital of 1.81 billion shares and the IPO price of 13 sen per share, the company is expected to have a market capitalisation of RM235.3 million upon listing.
Teh said the plantation company is expected to add to its replanting expenditure over the next two years, which includes the purchase of the high quality “Felda Yangambi” line ofgerminatedseeds,topsoilpurchase for palm seedlings, land clearing expenses and costs associated with palm groves preparation where the seedlings are to be planted.
As at June 30, 2016, 831.7 hectares (76.9 per cent) of its oil palm trees – aged between five to 20 years – were mature, while 217.6 hectares (20.1 per cent) were one to four years old.
Only 16.4 hectares (1.5 per cent) had oil palm trees above 21 years, which is past the peak production and produces less FFB, while 16.4 hectares are undergoing replanting.
Teh said the group plans to expand its landbank, but not anytime soon.
Teh said he is upbeat on the company’s prospects in taking advantage of the next cycle of demand arising from the attractive crude palm oil price, currently valued about RM3,000 per tonne.
The group is principally involved intheplantationestatemanagement, FFB sale and property investment holding.
Its plantation operation, the Matang Estate, comprises 45 contiguous pieces of agricultural land located within the Ledang and Segamat districts in Johor and covering 1,096.3 hectares. — Bernama