29/03/2024 (New Straits Times), Kuala Lumpur - MKH Oil Palm (East Kalimantan) Bhd (MKHOP) aims to generate RM136.4 million from its initial public offering (IPO).

MKH Oil unveiled the prospectus for its IPO on the Main Market of Bursa Malaysia today.

The IPO includes the issuance of 220 million new shares, representing 21.5 per cent of the company's expanded share capital.

Additionally, there is an offer to sell 30.7 million existing shares, constituting 3.0 per cent of the enlarged shares, through private placement to chosen investors.

"Among the 220 million new shares, 51.21 million will be open for application by the Malaysian public through balloting, while the remaining 168.79 million new shares are set aside for private placement to selected investors," the company stated.

MKH Oil said out of the RM136.4 million raised, RM42 million or equivalent to 30.8 per cent of the IPO proceeds, will be utilised to acquire land for oil palm plantation in East Kalimantan province.

Additionally, RM9 million, representing 6.6 per cent of the funds, will be designated for establishing a PK crushing facility to diversify the company's revenue sources.

"Capital expenditure for existing plantation lands, refurbishment and/or upkeep of existing palm oil mills, refurbishment and construction of workers and staff housing quarters, and expansion of electricity supply will consume RM42.0 million, accounting for 30.8 per cent of the total amount raised," the company added.

MKH Oil indicated that RM30 million, equivalent to 22 per cent of the IPO proceeds, will be utilised for repaying a loan owed to a related party.

The remaining funds amounting to RM13.4 million, constituting 9.8 per cent of the total, will be allocated for working capital and covering listing expenses.

MKH Oil chairman Tan Sri Datuk Chen Kooi Chiew @ Cheng Ngi Chong said the funds raised from the IPO will drive its growth strategy, particularly in expanding its plantation landbank.

"This expansion entails acquiring lands adjacent to current estates to capitalise on existing processing and jetty facilities.

"We will also invest in new machinery and equipment to enhance operational efficiency, increase processing capabilities, and broaden our product offerings," he added.

https://www.nst.com.my/business/corporate/2024/03/1031902/mkh-oil-palms-ipo-raise-over-rm136mil