(From left) M&A Securities Sdn Bhd head of corporate finance Gary Ting and managing director Datuk Bill Tan, MKH Oil Palm (East Kalimantan) Bhd non-independent non-executive chairman Tan Sri Chen Kooi Chiew @ Cheng Ngi Chong and executive director Datuk Lee Khee Meng, as well as Kenanga Investment Bank Bhd director of corporate and institutional coverage Datuk Kenny Yong Foo Ken at the underwriting agreement signing ceremony.

KUALA LUMPUR (Feb 21): Property group MKH Bhd’s wholly owned plantation arm MKH Oil Palm (East Kalimantan) Bhd ­(MKHOP) has signed an underwriting agreement with M&A Securities Sdn Bhd and Kenanga Investment Bank Bhd (Kenanga IB) to jointly underwrite a total of 51.21 million new shares.

MKHOP’s initial public offering (IPO) on the Main Market of Bursa Malaysia entails the public offering of 220 million new shares, representing 21.5% of its enlarged share capital, according to MKH in a past filing.

In another bourse filing on Wednesday, MKH said 51.21 million new issue shares of MKHOP are reserved for application by the Malaysian public, of which 25.6 million new shares will be made available for application by public investors, and another 25.6 million new shares for Bumiputera public investors.

Previously, MKH said that there would be a proposed offer for sale of 30.7 million existing shares by its wholly owned subsidiary Metro Kajang (Oversea) Sdn Bhd, representing 3% of the enlarged share capital of MKHOP.

Based on an indicative IPO price of 60 sen per share (with the final price to be determined at a later stage), MKHOP aims to raise RM132 million from the public issue, while the offer for sale will raise RM18.4 million, bringing total fundraising to RM150.4 million, which will be used to expand the oil palm plantation business, as well as enhance the efficiency of fresh fruit bunch harvesting and palm oil milling activities.

MKHOP operates two estates in East Kalimantan, Indonesia, with a total land area of 18,205.3 hectares. About 93.4% of this land, or 17,008.8 hectares, is planted with oil palm trees, and is supported by a palm oil mill and a jetty.

Barring any unforeseen circumstances, the IPO exercise is expected to be completed by the first quarter of 2024.