Ecoscience managing director Wong Choi Ong said the group had benefited and had grown in the past 18 years due to the palm oil industry being regarded as a resilient sector and its substantial role in the global food supply chain. He added the future of the industry continues to be positive based on the global consumption of crude palm oil (CPO)
PETALING JAYA: Ecoscience International Bhd
will seek to raise RM24.7mil from its initial public offering (IPO) with the proceeds meant for expansion of its operations and working capital.
The integrated palm oil milling services provider is scheduled to list on the ACE Market of Bursa Malaysia on July 18.
Ecoscience managing director Wong Choi Ong said the group had benefited and had grown in the past 18 years due to the palm oil industry being regarded as a resilient sector and its substantial role in the global food supply chain.
He added the future of the industry continues to be positive based on the global consumption of crude palm oil (CPO) which grew at a compound annual growth rate of 2.5% between 2018 and 2020.
“From the total proceeds of RM24.7mil to be raised, we plan to allocate RM5mil for the incorporation of a wholly-owned subsidiary in Indonesia and the establishment of a new fabrication facility and office located at Balikpapan in East Kalimantan province, Indonesia,” Wong said in a statement.
With the increase in upstream activities and Indonesia being the world’s largest palm oil producer, he said, the move would put the group in a stronger position to capitalise on the uptrend.
“The said expansion is expected to shorten the response time to requests from our Indonesian customers and reduce our shipping costs.
“Furthermore, having a fabrication facility in Indonesia also enhances the group’s prospects in securing new contracts for the expansion or development of palm oil plants and facilities or other related sectors there,” he said.
The group would expand its environmental and energy efficiency business through the purchasing and leasing of non-chemical water treatment equipment for usage in palm oil and other industries. Some RM1mil will be allocated for this venture.
“This will give the group a recurring revenue stream while providing a platform for us to diversify our customer base to other sectors,” Wong said.
Ecoscience has a dividend policy to distribute dividends of at least 20% of its annual audited consolidated profit after tax attributable to its shareholder.
Hong Leong Investment Bank Bhd is the principal adviser, sponsor, underwriter and placement agent for the IPO exercise.
Application for the IPO shares will close on July 1 with balloting set for July 6.
There have been 13 new company listings on the local exchange this year, 10 of which have been on the ACE Market.
There will be five more listing ahead of Ecoscience debut on the local exchange, which would take the total number of IPO to-date to 19.
Ecoscience listing will entail an offer of 112.2 million shares, comprising a public issuance of 82.2 million new shares and an offer for sale of 30 million existing shares.
A total of 17 million of shares are available for the public; 6.8 million for eligible directors, employees, and persons who have contributed to the success of Ecoscience; 42.5 million are available by way of private placement to identified bumiputra investors approved by the Ministry of International Trade and Industry; and 45.9 million are available by way of private placement to selected investors.
At an issue price of 30 sen per share and an enlarged share capital of 340 million shares upon listing, Ecoscience will have a market capitalisation of RM102mil.
Ecoscience managing director Wong Choi Ong said the group had benefited and had grown in the past 18 years due to the palm oil industry being regarded as a resilient sector and its substantial role in the global food supply chain.
He added the future of the industry continues to be positive based on the global consumption of crude palm oil (CPO) which grew at a compound annual growth rate of 2.5% between 2018 and 2020.
“From the total proceeds of RM24.7mil to be raised, we plan to allocate RM5mil for the incorporation of a wholly-owned subsidiary in Indonesia and the establishment of a new fabrication facility and office located at Balikpapan in East Kalimantan province, Indonesia,” Wong said in a statement.
With the increase in upstream activities and Indonesia being the world’s largest palm oil producer, he said, the move would put the group in a stronger position to capitalise on the uptrend.
“The said expansion is expected to shorten the response time to requests from our Indonesian customers and reduce our shipping costs.
“Furthermore, having a fabrication facility in Indonesia also enhances the group’s prospects in securing new contracts for the expansion or development of palm oil plants and facilities or other related sectors there,” he said.
The group would expand its environmental and energy efficiency business through the purchasing and leasing of non-chemical water treatment equipment for usage in palm oil and other industries. Some RM1mil will be allocated for this venture.
“This will give the group a recurring revenue stream while providing a platform for us to diversify our customer base to other sectors,” Wong said.
Ecoscience has a dividend policy to distribute dividends of at least 20% of its annual audited consolidated profit after tax attributable to its shareholder.
Hong Leong Investment Bank Bhd is the principal adviser, sponsor, underwriter and placement agent for the IPO exercise.
Application for the IPO shares will close on July 1 with balloting set for July 6.
There have been 13 new company listings on the local exchange this year, 10 of which have been on the ACE Market.
There will be five more listing ahead of Ecoscience debut on the local exchange, which would take the total number of IPO to-date to 19.
