KUALA LUMPUR (June 12): Johor Plantations Group Bhd has secured five cornerstone investors for what would be the largest initial public offering (IPO) in more than two years, according to people familiar with the matter.
The five cornerstone investors are Retirement Fund Inc (KWAP), Fortress Capital Asset Management (M) Sdn Bhd, AHAM Asset Management Bhd, Areca Capital Sdn Bhd and Aberdeen Asset Management Sdn Bhd, one of the people told The Edge.
Johor Plantations is seeking to raise more than RM700 million from the IPO on Bursa Malaysia’s Main Market, another person said.
The IPO is expected to be Malaysia’s largest in terms of proceeds raised since Farm Fresh Bhd (KL:FFB), which raised RM1 billion in March 2022.
Johor Plantations did not respond to a request for comment that was made through its external public relation firm.
Johor Corp owns Johor Plantations via Kulim (M) Bhd, which was taken private in August 2016. The listing would offer investors up to 35% of Johor Plantations’ enlarged share capital.
The IPO involves up to 875 million shares comprising a public issue of 464 million new shares and an offer for sale of up to 411 million existing shares, according to its draft prospectus filed to Securities Commission Malaysia.
Johor Plantations’ listing exercise comes at a time when Bursa Malaysia is seeing a resurgence of listings.
The company will be the second plantation listing on Bursa this year, after its smaller peer MKH Oil Palm (East Kalimantan) Bhd’s (KL:MKHOP) debut on April 30, which raised RM155.43 million.
Before MKH Oil Palm’s IPO, the last palm oil producer to list on Bursa was Matang Bhd (KL:MATANG) seven years ago in 2017.
Bursa has hosted 20 IPOs so far this year, with the largest so far being the IPO of fertility specialist Alpha IVF Group Bhd (KL:ALPHA) that raised RM446.54 million.
According to the draft prospectus, net profit for the first seven-month period of financial year ended Dec 31, 2023 (7MFY2023) fell 80% to RM58.34 million from RM292.13 million in the previous corresponding period, while revenue declined 44% to RM622.36 million from RM1.11 billion.
This is in contrast with its performance in FY2022, with net profit growing 44% to RM495.59 million from RM344.8 million in FY2021, while revenue increased 13% to RM1.75 billion from RM1.55 billion.
RHB Investment Bank is the IPO’s principal adviser and managing underwriter and joint bookrunner with AmInvestment Bank, CIMB Investment Bank, Affin Hwang Investment Bank, and CLSA.
RHB Investment Bank, AmInvestment Bank, CIMB Investment Bank and CLSA are also joint global coordinators.