PETALING JAYA: Boustead Plantations Bhd, en route to a Main Market listing next month, aims to provide a dividend payout ratio of at least 60% of its after-tax profit in the coming financial years.
The plantation arm of Boustead Holdings Bhd said the after-tax profit would exclude profit retained by its associate and joint-venture companies, as well as any unrealised income from fair-value adjustments that are non-cash in nature.
Boustead Plantations expects to raise up to RM1.05bil from its initial public offering (IPO) based on an indicative price of RM1.60 per share.
Set to be one of the largest IPOs in the country, Boustead Plantations, which is scheduled to list on June 26, said of the total proceeds, RM928mil would accrue to itself, while the balance of RM121mil will go to Boustead Holdings.
“Demand for our stock has been quite encouraging,” Boustead Plantations vice-chairman Tan Sri Lodin Wok Kamaruddin said.
“We’ve been getting many requests for our IPO shares, but unfortunately, we do not have that many shares to offer. So, we hope investors who have not been able to subscribe to our IPO shares would buy our shares from the open market,” Lodin said after the launch of Boustead Plantations’ prospectus yesterday.
Boustead Plantations is offering up to 656 million shares to investors, out of which 163.57 million will be offered to institutional investors, while the remaining 492.43 million will be offered to retail investors, including unitholders of Al-Hadharah Boustead Reit, Boustead Holdings and eligible directors and employees. Only 64 million shares will be opened to the public.
Upon listing, the total enlarged and paid-up share capital of Boustead Plantations will be RM800mil, comprising 1.6 billion shares.
Lodin said Boustead Plantations planned to expand its total planted area to 100,000ha within the next three years from the current 71,000ha.
“My personal target is that by 2016, we should be managing 100,000ha of plantation area,” Lodin said.
He said the group’s land bank expansion programme would be achieved through the acquisition of existing plantations and plantation reserve land, primarily in Malaysia.
“The priority is to focus on Malaysia, but if good opportunities emerge in Indonesia or Papua New Guinea, we will certainly consider them,” Lodin said, adding that by increasing its planted land bank, the group would be able to increase its yields and strengthen its profitability for the long term.
According to its prospectus, Boustead Plantations would allocate up to RM420mil from its IPO proceeds to acquire plantation land, and a further RM96mil for replanting exercise and capital expenditure. The remainder would be used for the repayment of bank borrowings and listing expenses.
Lodin said crude palm oil (CPO) prices are expected to move higher over the next six months, driven by improving demand amid a “decent” stockpile level.
“In the next one month, we could see a pickup in demand from consuming countries such as Pakistan and India, given the upcoming Ramadhan and Aidil Fitri festivities,” Lodin said.
“We expect CPO prices to hover between RM2,700 and RM2,800 per tonne by the third and fourth quarters of this year,” he added.
The three-month benchmark CPO futures contracts are currently trading at around RM2,500 per tonne.
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