Muar Ban Lee to Raise RM13.7 Million from IPO

Oil seed expellers maker sees rising demand for its products and services KUALA LUMPUR: Oil seed expellers manufacturer Muar Ban Lee Group Bhd will raise up to RM13.7mil via its initial public offering (IPO) set for Oct 28. The company, to list on Bursa Malaysia main market, will offer 21 million new shares of 50 sen each at 65 sen apiece. Of the total, two million shares will be made available for public subscription. Seven million more shares would be offered for sale by way of placement to approved bumiputra investors. The public issue is expected to raise RM13.65mil.

The company’s share capital will increase to RM46mil and at the issue price of 65 sen a share, its initial market capitalisation will amount to RM59.8mil. Maybank Investment Bank Bhd is the adviser, sole underwriter and placement agent for the exercise. Speaking at Muar Ban Lee’s prospectus launch yesterday, Maybank Investment head of investment banking Amirul Feisal Wan Zahir said demand for palm kernel oilseed expellers and plant set-up services for plantations and millers globally were expected to rise in tandem with the growth in the palm kernel industry. “This augurs well for the company,” he said, citing data from the US Department of Agriculture which stated that world production of palm kernel oilseeds had been growing consistently over the past five years and estimated to reach 11.95 million tonnes by 2009/2010. Muar Ban Lee executive director Datuk Seri Tan Khoon Hai said proceeds from the IPO would be used to buy machinery, set up new offices – one each in Sarawak and Indonesia – and to fund research and development, among others. Indonesia is currently its biggest market, contributing 50% to turnover. Tan said, moving forward, Indonesia together with Nigeria and Papua New Guinea would represent the company’s main export markets, as they collectively contributed more than 50% of the world’s production of palm kernel oil.
Currently, Muar Ban Lee has two factories in Muar, Johor, each running at 70% capacity. “We have bought more land in Muar and will build a new factory when the need arises,” Tan said. Muar Ban Lee, via its subsidiaries, is principally involved in the design and manufacture of oilseed expellers and ancillary machinery for oilseed crushing plants and the installation and commissioning of such plants. The company, which has been in the business for more than 20 years, recorded a net profit of RM7.9mil for its financial year ended Dec 31, 2008. Based on Muar Ban Lee’s current paid-up capital of 71 million 50 sen shares, net earnings per share stood at 11.26 sen. Separately, Amirul told StarBiz that Maybank Investment was currently working on “several local IPO deals”. “We think a lot of companies are trying to catch the (positive market) wave,” he said. Muar Ban Lee’s listing is the bank’s first IPO deal for the year. Source : The Star by Yvonne Tan

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