Boustead Plantations IPO Oversubscribed by 6 times

Boustead Plantations Berhad Initial Public Offering (IPO) received an overwhelming response with its public portion of 64 million shares. It was oversubscribed by 6  times. The IPO attract 30,787 applications for 448 million shares.

The Institutional Price was fixed at RM1.60 per Offer Share. Accordingly, the Final IPO Price for the Retail Offering is fixed at RM1.60 per Offer Share as set out in the prospectus. As such there is no refund to be made to successful retail applicants.

Notices of Allotment will be dispatched by post to all successful applicants on or before 25th June 2014. Boustead Plantations is expected to be listed on the Main Market of Bursa Malaysia on 26th June 2014 under stock name “BPLANT”.

Detail please refer to Bursa Malaysia webpage

Boustead Plantations Bhd

Boustead Plantations Bhd's initial public offering (IPO) is expected to raise close to RM1bn, said Boustead Holdings Bhd deputy chairman and group managing director Tan Sri Lodin Wok Kamaruddin. ―We have received shareholders' approval for the listing of Boustead Plantations,‖ he said at a briefing, here, yesterday. ―Based on an indicative offer price of RM1.60 a share, the IPO should be able to raise RM928m. The listing is slated for mid-June. As of now, there are no cornerstone investors,‖ Lodin said. He noted that the Boustead Plantations IPO is timely because the price of crude palm oil (CPO) is on the uptrend. (BT) 

BHB deputy chairman and group managing director Tan Sri Lodin Wok Kamaruddin (pic) said the group was planning for the initial public offering (IPO) to take place between end-May and mid-June.

“The timing for the listing is good, as we expect crude palm oil (CPO) prices to improve during that period, and hope to get the maximum benefit from it as well as market demand for our CPO,” he told reporters after the group’s EGM yesterday, where shareholders approved the listing.

In a circular to shareholders, the group said RM420mil or 45.3% of the total gross proceeds would be used to beef up Boustead Plantations’ landbank, RM390mil or 42% for the repayment related to Boustead REIT’s (BREIT) privatisation, and the rest for replanting and capital expenditure as well as to pay for the IPO expenses.

Lodin said the company was looking to expand Boustead Plantations’ landbank, both greenfield and brownfield, mainly in Sabah and Sarawak.

“At the moment, we are focusing on improving our efficiency and production of our oil palm estates,” he said.

Boustead Plantations plans to grow its landbank by 20,000ha from its current total planted area of 71,092ha within five years.

Half of the acquisition is to be financed by the IPO proceeds and by debt instruments, if required, while further fund-raising will cover the rest. It is offering up to 656 million shares of its enlarged 1.6 billion share base, comprising 580 million new shares and 76 million shares under the offer for sale.

Some 174.59 million and 206.84 million shares would be set aside for BREIT and BHB shareholders, respectively.

The entitlement offer is one Boustead Plantations share for every five BHB shares, and three Boustead Plantations shares for every five BREIT shares.

The remaining 47 million and 64 million shares for retailers have been apportioned for directors and staff and the Malaysian public.

BHB is also expecting to raise additional total gross proceeds of RM121.6mil from the offer for sale shares, with the allotment option expected to raise up to RM224mil.

BHB intends to maintain a controlling stake of 59% in Boustead Plantations and has committed a dividend payout of 60%.

The “illustrative” retail price of RM1.60 per IPO share was based on an approximate 16 times price earnings multiple (P/E) on an earnings per share (EPS) of about 10 sen.

The EPS took into account Boustead Plantations’ after-tax profit of RM159.7mil for the financial year 2013 estimate, it said.

The indicative offer price was at a discount to the prevailing valuations of comparable plantation firms such as Sarawak Plantation Bhd at a P/E of 18.24 times, IJM Plantations Bhd at 22 times and Hap Seng Plantations Holdings Bhd at 21 times.

Lodin expected CPO prices to maintain between RM2,600 and RM2,700 per tonne this year. Yesterday, the CPO price was at RM2,623 per tonne. (The Star)