May 22, 2014 / 9:07 AM / 3 years ago

Boustead Plantations set for $311 mln Malaysia listing on June 26-sources

KUALA LUMPUR, May 22 (Reuters) - Malaysian palm oil firm Boustead Plantations Bhd is expected to list on the local stock exchange on June 26 in a deal that will raise 1 billion ringgit ($311.14 million), two sources with knowledge of the deal told Reuters.

The initial public offering (IPO), which will follow the $226 million listing of Malaysia's biggest convenience store, 7-Eleven Malaysia Holdings Bhd in end-May, will be the largest in the Southeast Asian nation so far this year.

"The response has been very good," one of the sources said. "We have just announced the result of the ballot and set an indicative price at 1.60 ringgit (per share)."

The sources declined to be named as they are not authorised to speak to the media.

Officials with the company could not be reached for comment.

Boustead Plantations, which controls 40 oil palm estates and 10 mills across Malaysia, is offering a total of 656 million shares to investors, of which 580 million are new shares, according to draft prospectus filed in February.

The listing of the company, the plantation arm of financial-to-defense conglomerate Boustead Holdings Bhd , comes at a time where Malaysian palm oil prices are trading at more than four-month lows, having lost nearly 6 percent so far this year.

But top industry analysts earlier predicted that palm prices would get a boost from an El Nino climate shift and cling to 3,000 ringgit per tonne beyond June, possibly hitting 3,500 ringgit per tonne later in the year, if the crop-damaging weather phenomenon disrupts production.

"Generally the plantation sector is a good business because the profit is almost guaranteed, if you look at the historical track record of all plantations companies in Malaysia," said Kenanga Investment Bank analyst Alan Lim.

About 24.9 percent, or 163.6 million Boustead Plantations shares will be allocated to institutional investors with the rest for retail investors. From the institutional tranche, 125.2 million shares are being sold to bumiputra investors, the prospectus showed.

Bumiputra are ethnic Malays and other indigenous people in Malaysia who receive preferential treatment in business, housing and education under a decades-old government policy.

Indigenous "bumiputra" institutions and individuals have first refusal over the offer, under the so-called Ministry of International Trade and Industry tranche.

Malaysia is the world's No.2 grower of palm oil after Indonesia, supplying the tropical commodity to major consumers including China, India, Europe and the Middle East to be used as fuel as well as an ingredient to make foodstuff, soaps and cosmetics.

The benchmark August contract on the Bursa Malaysia Derivatives Exchange was trading between 2,499-2,531 ringgit per tonne on Thursday.

Affin Investment Bank, Credit Suisse and Maybank Investment Bank are the global co-ordinators of the deal.

$1 = 3.2140 Malaysian ringgit Reporting By Anuradha Raghu and Yantoultra Ngui; Editing by Matt Driskill

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