MKHOP to raise RM136m from IPO to fuel expansion

Oil palm plantation player MKH Oil Palm (East Kalimantan) Bhd (MKHOP) has launched its prospectus in conjunction with its upcoming initial public offering (IPO) on the Main Market of Bursa Malaysia Securities Bhd (Bursa Securities).

MKHOP, an upstream oil palm plantation group, is principally engaged in the cultivation of oil palm and production and sale of crude palm oil (CPO) and palm kernel (PK).

The group operates two oil palm plantations totalling 18,205.3ha in East Kalimantan, Indonesia supported by an onsite palm oil mill and jetty. The plantations are Indonesian Sustainable Palm Oil (ISPO) certified, reflecting the group’s sustainable plantation practices.

The majority of its oil palms trees are in prime mature stage or peak production years, between the ages of 10 to 16 years.

Strategically located in East Kalimantan’s Samarinda (the provincial capital), Balikpapan (the financial centre), and Indonesia’s new capital Nusantara, these plantation estates are expected to benefit from their prime geographical placement.

MKHOP non-independent non-executive chairman Tan Sri Chen Kooi Chiew @ Cheng Ngi Chong said, “Our prospectus launch marks another important milestone in our journey towards becoming a listed company on the Main Market of Bursa Securities. By tapping into the broader equity market, we are confident in enhancing the value of the group through business expansion and optimisation of operations.”

He said the IPO proceeds will accelerate their growth plans, which include expanding their plantation landbank by acquiring lands located near their existing estates to leverage on their existing processing and jetty facilities.

“We will also invest in new machinery and equipment to enhance operational efficiency, increase processing capabilities, and broaden our product offerings,” he added.

The upcoming IPO exercise is set to raise RM136.4 million. RM42 million or 30.8% of the IPO proceeds will be used to acquire lands for oil palm plantation within the East Kalimantan province while RM9 million or 6.6% will be allocated for the setting up of a PK crushing facility to provide the group with an additional income stream.

The group is targeted to be listed on the Main Market of Bursa Securities on April 30.