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Felda’s IPO in hot demand

June 13, 2012

Felda Global's IPO has been oversubscribed by more than 30 times.

KUALA LUMPUR: Palm oil giant Felda Global Ventures Holdings’ IPO has been massively oversubscribed amid hot demand for the world’s second-biggest listing this year after Facebook.

The institutional portion of the initial public offering has been oversubscribed by more than 30 times, Dow Jones Newswires reported yesterday. The share sale is expected to raise more than RM10 billion (US$3 billion).

Felda Global issued a price range of RM4 to RM4.65 per share for the sale of 2.19 billion shares, it said. Institutional subscription will close today and an announcement on the pricing is expected to be made later in the day.

The Malaysian government is floating Felda Global in a bid to turn it into a global commodities player, part of a larger push to divest state-run firms.

Analysts said they expected strong demand for the shares, a rare bright spot amid negative sentiment elsewhere, especially following the sensational flop of social media leader Facebook’s listing last month.

The retail share issue was priced at RM 4.55. Retail pricing closed yesterday.

CIMB and Maybank, joint global coordinators for Felda’s listing, declined comments when contacted.

Underpinning the issue’s prospects are a strong outlook for fast-growing palm oil demand and the Malaysian government’s strong backing for the listing and Felda Global’s development plans.

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.

A June 28 target date has been set for the palm oil, rubber and cocoa producer’s debut on the Kuala Lumpur exchange.



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