From left: Johor Plantations Group Bhd commercial and sustainability head Wan Adlin Wan Mahmood, human capital head Amran Zakaria, managing director Mohd Faris Adli Shukery, chairman Tan Sri Dr Ismail Bakar, chief financial officer Aziah Ahmad and plantation operations head Mohamad Yami Bakar (Photo by Patrick Goh/The Edge)

KUALA LUMPUR (June 12): Johor Plantations Group Bhd’s (KL:JPG) initial public offer (IPO) on the Main Market of Bursa Malaysia is expected to raise a total of RM735 million, of which approximately RM345.2 million will be raised via an offer for sale of 411 million existing shares held by its sole shareholder Kulim (Malaysia) Bhd.

Kulim, which was previously listed on Bursa Malaysia from 1975 to 2016, is now a wholly owned subsidiary of Johor Corp (JCorp). Upon listing on July 9, Kulim will retain a 65% stake in JPG, while the IPO would offer investors up to 35% of JPG’s enlarged share capital.

Of the RM735 million raised from the IPO, approximately RM389.8 million will be raised via a public issue of 464 million new ordinary shares in JPG. The public issue portion of the IPO has been opened for public application on Wednesday and will be closed on June 24.

Based on the enlarged issued share capital of 2.5 billion shares and the IPO price, which has been set at 84 sen per share, the expected market capitalisation upon listing would be RM2.1 billion, anticipated to be the largest IPO listing on Bursa Malaysia year to date.

This values JPG at approximately 12.6 times its financial year ended Dec 31, 2023 (FY2023) net profit of RM167.31 million. At 84 sen per share, JPG will be trading at about 12.5 times price-to-earnings ratio, based on its FY2023 earnings per share of 6.7 sen, according to its prospectus.

At its prospectus launch here on Wednesday, JPG shared that 50.5% of the total proceeds to be raised from the public issue, or RM196.83 million, have been earmarked for capital expenditure, including the construction of an integrated sustainable palm oil complex and replanting activities.

Meanwhile, 43%, or RM167.44 million, will be channelled towards the repayment of bank borrowings and 1.7%, or RM6.74 million, will be for working capital, while the remaining RM18.75 million will be utilised for listing related expenses.

“With these plans in motion, we are confident that JPG will not only grow its business operations but also offer better returns to our shareholders,” its managing director Mohd Faris Adli Shukery said during his speech at the prospectus launch.

The board plans to distribute a dividend of at least 50% of its net profits for each financial year, according to the prospectus.