MARKET DEVELOPMENT
Chemara Palmea Seeks to be First Plantation SPAC
Chemara Palmea Seeks to be First Plantation SPAC
18/08/2014 (The Star) - Chemara Palmea Holdings Bhd seeks to be the first plantation-based special purpose acquisition company (SPAC) and plans to raise RM650mil through a listing on the Main Market of Bursa Malaysia if its application is approved.
According to its draft prospectus lodged with the Securities Commission (SC), Chemara is offering 1.3 billion shares at 50 sen each, with 1.266 billion shares allocated to institutions and 34 million shares for retail investors.
The shares come with free detachable warrants on a one-to-one basis.
The company’s strategy is to use the proceeds to acquire oil palm plantations or companies that own oil palm plantations in Indonesia and Malaysia.
“We intend to acquire oil palm plantations or up to 95% stake in companies which own oil palm plantations in Indonesia and up to 100% of that in Malaysia.
“This will allow us to have majority ownership and management control over the operations as well as over the strategic and financial decisions of the asset,” Chemara said.
If its application is approved, the company plans to use up to 95.93% of its initial public offering (IPO) proceeds for the qualifying acquisition, and the rest for listing expenses.
A SPAC essentially has no operations or income-generating business at the point of its IPO.
The promoters are to the funds raised from its listing to acquire operating companies or businesses where they are familiar with. The acquisition is known as the “qualifying asset”.
There are four SPACs listed on Bursa Malaysia so far. The first is Hibiscus Petroleum Bhd that has “graduated” as a junior oil and gas company after acquiring a qualifying asset that fulfilled the criteria set by the SC.
The other three that have yet to get their qualifying asset are CLIQ Energy Bhd, Sona Petroleum Bhd and Reach Energy Bhd. All of them are in the oil and gas industry.
Chemara explained that it intended to acquire up to 20,000ha of yielding oil palm plantations in Indonesia consisting predominantly of brownfield land with a minimum planted area of about 8,000ha with the remaining land available for greenfield activity.
“The objective of such an acquisition is to increase the production and yield of such plantations and unlock the value of these plantations by leveraging on the experience, knowledge and expertise of our management team,” it said.
The key management of Chemara comprises Mohamad Helmy Othman Basha, Mohd Khairi Mahamor, Vanialingam Tharumalingam and Zainal Abidin Shariff.
Helmy, the managing director of Chemara, was previously head of plantation upstream Malaysia at Sime Darby Bhd, where he was responsible for managing about 340,000ha of oil palm plantation.
Both Helmy and Zainal, who is the executive director and chief financial officer of Chemara, were involved in the merger exercise of Sime Darby, Kumpulan Guthrie, Golden Hope Plantations and to Synergy Drive, which was later renamed to Sime Darby.
Meanwhile, Khairi is executive director and operations director and Vanialingam is executive director and technical director.
The management team is expected to hold at least 19.16% in Chemara post listing.
“As a SPAC, we believe our strength lies with the capabilities of our management team which comprise persons with professional and technical expertise and operational experience in oil palm and have extensive experience in the management of assets of listed plantation companies,” it said.
Maybank Investment Bank Bhd is the principal adviser, sole placement agent and underwriter for the IPO. MainStreet Advisers Sdn Bhd is the financial adviser.
In a related development, a wire report on Friday stated that Indonesian lawmakers were looking to restrict foreign ownership of plantations to no more than 30%, in a bid to maximise land usage, protect its indigenous citizens and tighten environmental controls.
Many Malaysian plantations have large interest in Indonesia where foreign ownership in plantations there is currently up to 95%.
While discussions on the draft bill are still ongoing, the fear is that the law could be retrospective, hence impacting existing foreign owners.
According to its draft prospectus lodged with the Securities Commission (SC), Chemara is offering 1.3 billion shares at 50 sen each, with 1.266 billion shares allocated to institutions and 34 million shares for retail investors.
The shares come with free detachable warrants on a one-to-one basis.
The company’s strategy is to use the proceeds to acquire oil palm plantations or companies that own oil palm plantations in Indonesia and Malaysia.
“We intend to acquire oil palm plantations or up to 95% stake in companies which own oil palm plantations in Indonesia and up to 100% of that in Malaysia.
“This will allow us to have majority ownership and management control over the operations as well as over the strategic and financial decisions of the asset,” Chemara said.
If its application is approved, the company plans to use up to 95.93% of its initial public offering (IPO) proceeds for the qualifying acquisition, and the rest for listing expenses.
A SPAC essentially has no operations or income-generating business at the point of its IPO.
The promoters are to the funds raised from its listing to acquire operating companies or businesses where they are familiar with. The acquisition is known as the “qualifying asset”.
There are four SPACs listed on Bursa Malaysia so far. The first is Hibiscus Petroleum Bhd that has “graduated” as a junior oil and gas company after acquiring a qualifying asset that fulfilled the criteria set by the SC.
The other three that have yet to get their qualifying asset are CLIQ Energy Bhd, Sona Petroleum Bhd and Reach Energy Bhd. All of them are in the oil and gas industry.
Chemara explained that it intended to acquire up to 20,000ha of yielding oil palm plantations in Indonesia consisting predominantly of brownfield land with a minimum planted area of about 8,000ha with the remaining land available for greenfield activity.
“The objective of such an acquisition is to increase the production and yield of such plantations and unlock the value of these plantations by leveraging on the experience, knowledge and expertise of our management team,” it said.
The key management of Chemara comprises Mohamad Helmy Othman Basha, Mohd Khairi Mahamor, Vanialingam Tharumalingam and Zainal Abidin Shariff.
Helmy, the managing director of Chemara, was previously head of plantation upstream Malaysia at Sime Darby Bhd, where he was responsible for managing about 340,000ha of oil palm plantation.
Both Helmy and Zainal, who is the executive director and chief financial officer of Chemara, were involved in the merger exercise of Sime Darby, Kumpulan Guthrie, Golden Hope Plantations and to Synergy Drive, which was later renamed to Sime Darby.
Meanwhile, Khairi is executive director and operations director and Vanialingam is executive director and technical director.
The management team is expected to hold at least 19.16% in Chemara post listing.
“As a SPAC, we believe our strength lies with the capabilities of our management team which comprise persons with professional and technical expertise and operational experience in oil palm and have extensive experience in the management of assets of listed plantation companies,” it said.
Maybank Investment Bank Bhd is the principal adviser, sole placement agent and underwriter for the IPO. MainStreet Advisers Sdn Bhd is the financial adviser.
In a related development, a wire report on Friday stated that Indonesian lawmakers were looking to restrict foreign ownership of plantations to no more than 30%, in a bid to maximise land usage, protect its indigenous citizens and tighten environmental controls.
Many Malaysian plantations have large interest in Indonesia where foreign ownership in plantations there is currently up to 95%.
While discussions on the draft bill are still ongoing, the fear is that the law could be retrospective, hence impacting existing foreign owners.