KUALA LUMPUR: Matang Bhd has signed an underwriting agreement with M&A Securities Sdn Bhd as the plantation company seeks a listing on the ACE Market of Bursa Malaysia Securities Bhd.

The IPO will involve the issuance of 130 million new shares of 10 sen each in Matang, or 7.18% of the enlarged issued and paid-up share capital after listing.

Under the agreement, M&A Securities will underwrite the entire 130 million new Matang shares to be offered to the Malaysian public via public balloting. 

Matang chairman Datuk Teh Kean Ming signed on behalf of the company while M&A Securities was represented by its managing director of corporate finance, Datuk Bill Tan Choon Peow.

The signing ceremony was witnessed by Tan Sri Ir Kuan Peng Ching @ Kuan Peng Soon and the board of directors of Matang.

M&A Securities is Matang's adviser, sponsor and underwriter for the IPO exercise.  

Teh said the appointment of M&A Securities as the underwriter brought Matang another step forward in its IPO exercise. 

Matang Group owns an oil palm plantation estate of approximately 1,096 hectares that spans across Segamat and Ledang District in Johor.  

Teh added the listing would boost the company’s profile and enable it to tap into the equity capital market to raise funds as well as to provide it with the financial flexibility to carry out its replanting for long term sustainability and growth.

Proceeds from the IPO will be used primarily for general working capital requirements in particularly for Matang Group’s day-to-day operations as well as for the purchase of fertilisers. 

Part of the proceeds will also be used for replanting exercise to improve the overall age profile of the oil palm trees in Matang Estate, as well as for capital expenditure to enhance the effectiveness in the operation of Matang Estate and to defray estimated listing expenses.   

Commenting on the IPO exercise, Tan said, the IPO is historic as there are over 18,000 shareholders who will now be able to unlock the value of their investments as their shares can be traded on Bursa Securities after listing.

“Further, the listing will also provide the shareholders the opportunities to partake in the future growth potential of a new local plantation business.

“The listing will undoubtedly put Matang in a favourable position to capture future growth opportunities in the plantation industry in Malaysia. 

“Furthermore, the upward trend of crude palm oil price from a low of about US$480 per  tonne in September last year may offer a good chance for top line growth for the Company,” Tan added. 

The crude palm oil is currently traded at over US$650 per tonne.

Matang is scheduled to be listed on the ACE Market of Bursa Securities in the first quarter of 2017.