Malaysian palm oil giant Felda said Thursday its initial public offering in June could raise up to 10.5 billion ringgit ($3.3 billion), making it the world’s second biggest Initial public offering this year after Facebook.
Malaysian palm oil giant Felda Global Ventures Holdings will raise $3.12 billion in the second largest public offering this year, as it announced its final share prices on Friday.
Felda Global is the world’s third largest oil palm plantations operator and is an arm of the Federal Land Development Authority (Felda), a government agency that provides land to rural poor.
It also offset worries over a lower than expected net profit in the quarter through March.
Felda raised around 10 billion ringgit ($3.1 billion) in the largest Initial public offering in Asia this year.
Four major IPOs in Asia Pacific worth nearly $2.5 billion have already been pulled this week, underscoring weak demand for new listings.
It is the second biggest in the world after Facebook, which raised $16 billion but suffered a slumping share price after its listing in May.
Felda Global is selling shares in Kuala Lumpur in the second biggest Initial public offering this year after Facebook Inc.
The Initial public offering, which has met resistance from farmers, comes amid turmoil in financial markets that prompted London based jeweler Graff Diamonds to Thursday shelve its $1.5 billion Initial public offering in Hong Kong.
The world’s largest Initial public offering this year after Facebook has already attracted a strong cast of cornerstone investors including French agribusiness giant Louis Dreyfus, Fidelity Investments and Middle Eastern sovereign fund Qatar Holding Limited liability company.
Feldal President Sabri Ahmad said the share price was within expectations.
He said Felda, which also plants rubber and sugar cane, would expand in Southeast Asia and Africa.
The Initial public offering had met resistance from thousands of ethnic Malay farmers, who partly own the company and fear they would lose out.
Prime Minister Najib Razak announced the listing plan in October, part of a larger push to divest state run firms and increase foreign investment in the country.
Felda was set up by the government in the 1950s as part of a rural development plan to alleviate poverty by giving poor Malays land to grow cash crops, mainly palm oil and rubber.
Felda currently sells palm fruit or crude palm oil to third parties, but the aim is to expand into palm oil processing and other downstream businesses to create a more fully self contained global player.
Najib has assured the farmers that the listing would be profitable for them, and promised a 1.68 billion ringgit ($527 million) windfall for the farmers and their families.
Felda has also allocated 20 percent of its shares to a trust fund for the farmers, who will receive annual dividends, officials said.
The farmers are mainly ethnic Malay Muslims, who make up about two thirds of Malaysia’s 28 million people.
It is a delicate issue for the government because their protests could undermine Najib’s coalition in national polls.
The Felda group owns 70 palm oil mills, seven refineries and a string of other manufacturing plants nationwide.
Analysts say the scheme will help Malaysia’s $27 billion palm oil sector — the world’s second largest — compete with top producer Indonesia.
After Felda, Asia’s largest hospital operator Integrated Healthcare Holdings is also planning an Initial public offering that could raise as much as 1.9 billion ringgit ($596 million).
IHH plans to raise about 6.4 billion ringgit,two people familiar with the matter said June 15.
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