Malaysian Palm Oil Giant to Make $3.12b in IPO
Kuala Lumpur. Malaysian palm oil giant Felda Global Ventures Holdings will raise $3.12 billion in the second-largest public offering this year, as it announced its final share prices on Friday.
Felda is selling a total of 2.19 billion shares, the majority of which, or 1.92 billion, will go to institutional investors. The listing is scheduled for June 28.
The price for the institutional portion of the share issue was set at 4.55 ringgit ($1.44) per share, Felda said in a statement to Malaysia’s stock market, at the high end of the expected range of 4.00-4.65 ringgit.
The final retail price was set at 4.45 ringgit, it said, offering a 10-cent discount. The total offering will raise 9.93 billion ringgit ($3.12 billion).
The Felda IPO, which has been oversubscribed, looks to buck a gloomy outlook for new issues after Facebook’s shares plummeted following its hyped-up listing last month.
Felda Global is the world’s third-largest oil palm plantations operator and is an arm of the Federal Land Development Authority (Felda), a government agency that provides land to rural poor.
Prime Minister Najib Razak announced the listing plan in October, part of a larger push to divest state-run firms and increase foreign investment in the country.
He also hopes to curry favor with the more than 112,000 settler families who own part of the plantation land and stand to get 15,000 ringgit each as a windfall from the listing, ahead of polls due by latest next April.
Some settlers have opposed the listing, however, concerned the scheme may expose them to more risk and potentially rob them of their land.
Analysts say the scheme will help Malaysia’s $27 billion palm oil sector — the world’s second largest — compete with top producer Indonesia.
Felda currently sells palm fruit or crude palm oil to third parties, but the aim is to expand into palm oil processing and other downstream businesses to create a more fully self-contained global player.
Palm oil is a key ingredient in soap and a range of food products whose consumption is predicted to soar in coming decades. Besides palm fruit, Felda also produces rubber, cocoa, and other products.