Johor Corp picks banks for plantation unit IPO

KUALA LUMPUR (Aug 11): Johor Corp Bhd (JCorp) is reported to have picked banks to arrange an initial public offering next year for its plantation unit, Kulim (Malaysia) Bhd, that could raise up to RM1 billion.

The Johor government-owned group is working with advisers including RHB Bank Bhd, Affin Bank Bhd and AMMB Holdings Bhd on the listing, Bloomberg reported on Thursday (Aug 11), quoting unnamed sources with knowledge of the matter.

CLSA Ltd and CIMB Group Holdings Bhd are also working on the planned share sale of Kulim and the operation could be valued at up to US$1 billion (RM4.45 billion) in the offering, the report said.

Previously, The Edge Malaysia weekly had reported in its May 16-22, 2022 edition that JCorp is mulling a flotation of Kulim on Bursa Malaysia, to ride on strong crude palm oil prices, with RHB Investment Bank Bhd roped in for the listing.

Spokesmen for Affin, AMMB, CIMB, CLSA and RHB declined to comment on the matter when contacted on Thursday.

A representative for Johor Corp and Kulim confirmed that the group is in the process of engaging external advisers, but said he is unable to share further details at this point in time.

Kulim was listed in 1975 and Johor Corp became a major shareholder of the plantation company a year later. JCorp took Kulim private in 2016.

Kulim's plantation assets are small compared with some of the behemoths on Bursa. It has 63,158ha of plantation land, of which 88% (55,796ha) is located in Malaysia and 12% (7,362ha) in South Sumatra, Indonesia, according to the company's website.

Based on a check from CTOS’ website, Kulim suffered an after-tax loss of RM461.31 million on the back of RM1.41 billion in revenue for the financial year ended Dec 31, 2020 (FY20). In FY19, it suffered an after-tax loss of RM98.2 million, on revenue of RM1.21 billion.

The company was last profitable in FY18 when it reported an after-tax profit of RM32.87 million on the back of RM1.39 billion in sales.